The Assumption Most Property Owners Make
Foreign investors who already own real estate in Turkey — an apartment bought for the citizenship-by-investment programme, a commercial unit acquired years ago, land held for future development — often reach the same conclusion when they decide to incorporate: rather than wiring fresh cash to fund the new company's capital, why not simply put the property in? It is already Turkish-registered, already owned, and moving it "in-house" feels like a formality rather than a transaction.
Turkish law does allow this. The Turkish Commercial Code treats real estate as a form of in-kind capital (ayni sermaye), on the same legal footing as machinery, vehicles, or intellectual property rights contributed instead of cash. But three things about how this actually works in practice are missing from almost every general guide to Turkish company formation — and each one can change whether contributing the property is actually the better move.
This is a companion piece to our guide on using cryptocurrency as capital — both are forms of in-kind (ayni) capital contribution under the same Turkish Commercial Code articles. The mechanics differ enough, though, that this article stands on its own: real estate has none of crypto's valuation problem, but it has cost and disqualification issues crypto does not.
Can Real Estate Actually Be Used as Capital?
Yes. Under the Turkish Commercial Code (TTK No. 6102), founders of a Ltd. Şti. or A.Ş. can meet some or all of the company's minimum capital requirement with an in-kind contribution instead of cash, provided the asset can be reliably valued and transferred to the company's ownership. Real estate — a titled apartment, commercial unit, or parcel of land — is one of the most straightforward assets to use this way, precisely because Turkey already has a mature, court-integrated system for valuing property.
The process itself follows TTK Art. 343: the value of the contributed property is not simply agreed between the founder and the company — it is determined by expert appraisers (bilirkişi) appointed by the commercial court in the jurisdiction where the company will be headquartered. The resulting valuation report becomes the official capital value recorded at incorporation, and the property's title is then formally transferred from the founder's name into the company's name at the Land Registry Directorate (Tapu ve Kadastro Müdürlüğü).
The Requirement That Disqualifies Many Properties
Here is the first point most founders do not check before deciding to go this route: the property being contributed must be free of encumbrances. Under Turkish law, an asset carrying a mortgage, an attachment, a court injunction, or any other limited real right registered against it cannot be accepted as in-kind capital in its current state — the encumbrance itself represents an uncertain claim against the asset's value, which defeats the purpose of the court-appraised valuation in the first place.
This matters more than it might sound, because a large share of foreign-owned property in Turkey was purchased partly on credit — through a Turkish mortgage, a developer instalment plan secured against the title, or financing tied to a citizenship-by-investment purchase. Any of these register as an encumbrance on the title deed. A founder who assumes their owned apartment is "ready to go" as capital may discover, only once the appraisal process starts, that the mortgage has to be fully cleared and the lien formally released at the Land Registry before the property qualifies at all — adding time and cost to a process that was meant to save both.
Before assuming a specific property can be used as capital, pull a current title deed record (tapu kaydı) and confirm there is no registered mortgage, annotation, or injunction against it. This is a five-minute check that can save weeks of restructuring an incorporation timeline built around the wrong assumption.
Why This Isn't a Free Internal Transfer
The second point almost no guide mentions: contributing a property you already own to your own new company is not treated as a cost-free internal move. Turkish law treats it as a disposal of the property, with two direct financial consequences.
| Cost | What It Applies To |
|---|---|
| Title deed fee (tapu harcı) | Charged under the Fees Law (Harçlar Kanunu No. 492) on the court-appraised value of the property being transferred into the company's name — the same category of fee applied to an ordinary sale, not a reduced or waived rate. |
| Corporate capital gains treatment | Any gain between the property's original acquisition cost and its appraised contribution value is added to the company's taxable profit and taxed at the standard 25% corporate rate. Unlike personal ownership, where property held for over five years can qualify for a capital gains exemption, a company has no such holding-period exemption — the full gain is taxable however long the property was originally held by the founder personally. |
Put together, a founder contributing an appreciated property can end up paying a real cash cost — title deed fees plus tax on the gain — simply to move an asset they already own from their own name into their own company's name. None of this is waived because no money changes hands between unrelated parties; the tax and fee system treats the transfer the same way it would treat a sale.
The Deduction Only Cash Contributions Get
The third point is the one that most changes the calculus, and it is almost never connected to this decision in general company-formation guides: Turkey's notional interest deduction for capital increases (KVK Art. 10/1-ı) is available only for cash capital contributions — not for in-kind contributions like real estate.
In practice, this means a founder can deduct a notional interest amount from taxable profit every year the qualifying cash capital remains in the company — a genuine, ongoing tax benefit with no equivalent for founders who fund the same company by contributing property instead. A foreign founder deciding between "put the apartment in" and "sell the apartment separately, then wire the proceeds as cash capital" is not just choosing between two ways of reaching the same capital figure — they are choosing between a path that carries an ongoing deduction and one that does not, on top of the title deed fees and capital gains exposure the property route already carries.
None of this means cash is automatically the right call — selling a property to fund cash capital has its own transaction costs and timing constraints, and the notional interest deduction itself has a limited multi-year window under current rules. The point is that the choice deserves a real comparison before incorporation, not an assumption that "using what I already own" is obviously the cheaper or simpler path.
When Contributing Property Actually Makes Sense
None of the above means real estate is a poor choice as capital — it means the decision should be made with the full picture, not the assumption that it is a free substitute for cash.
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The property is genuinely unencumbered
Confirm this from the title deed itself before planning around the property as capital — not from memory of how the original purchase was financed.
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You do not have easy access to equivalent cash
If liquidating the property to raise cash instead is itself slow, costly, or undesirable — for example, if you want to keep occupying or renting it out under the new company's ownership rather than sell it — contributing it directly may still be the more practical route despite the fee and deduction trade-offs.
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The appraised value comfortably covers your capital requirement
The court-appointed appraisal is the number that counts, not the property's market listing price or what you paid for it — get an informal sense of likely appraised value before committing the incorporation timeline to this route.
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You have modelled the tax cost against the cash alternative
Run the actual numbers — title deed fee, capital gains exposure, and the forgone notional interest deduction — against what selling the property and injecting cash would cost, including the property's own capital gains treatment on sale. The better answer depends on your specific numbers, not a general rule.
SetupTurkiye helps foreign founders weigh cash versus in-kind capital contributions — including real estate and other assets — against the actual tax and fee consequences of each path, before the incorporation process begins. Get in touch →
Summary
- Real estate can be used as in-kind capital for a Ltd. Şti. or A.Ş., valued by a court-appointed expert under TTK Art. 343 and transferred at the Land Registry.
- A property carrying a mortgage, attachment, or injunction does not qualify until the encumbrance is fully cleared — check the current title deed record before assuming a property is ready to use.
- Contributing a property to your own company is treated as a disposal: it triggers title deed fees on the appraised value, and any gain is added to the company's taxable profit at 25%, with no holding-period exemption.
- Only cash capital contributions qualify for Turkey's notional interest deduction (50%, or 75% for cash sourced from abroad) — real estate and other in-kind contributions get no equivalent benefit.
- The right choice between contributing property directly and selling it to fund a cash contribution depends on the specific numbers — encumbrance status, appraised value, and the deduction trade-off should all be modelled before incorporation, not assumed.