The Presidential Decree regarding assistance for construction within the scope of urban transformation projects to be carried out in Istanbul has been published in the Official Gazette and entered into force.
In accordance with the relevant articles of Law No. 6306 on the Transformation of Areas Under Disaster Risk, principles and procedures regarding the provision of assistance for construction, including grants, loans, and eviction support, have been determined for urban transformation projects.
According to the decision, after obtaining a license and establishing a condominium easement on the parcel where the risky structure within the scope of Law No. 6306 is located, individuals or legal entities may be granted construction assistance if they request it in accordance with this decision, in the residences and workplaces they own in the existing structure and to be determined by the administration.
In cases where the number of independent sections or construction area in the project to be produced on the parcels where the risky building is located exceeds one and a half times the existing number of independent sections or construction area, and in cases where a building license for the new building was issued before April 1, 2023, the construction assistance will not be available for construction.
If the structure benefiting from assistance for construction is an unindividuated cooperative, the cooperative's membership list and the existing independent sections in the risky building will be taken into account.
Grant and loan support
Property owners can receive grants up to 700,000 Turkish Lira and loans up to 700,000 Turkish Lira for a residence, grants up to 350,000 Turkish Lira and loans up to 350,000 Turkish Lira for a business premises. Additionally, grants up to 1,400,000 Turkish Lira and loans up to 700,000 Turkish Lira can be provided for each additional residence and business premises, respectively. Furthermore, the property owner can utilize the grant and loan designated for the acquired property through sales or transactions covered by Law No. 6306.
In addition to the grant provided for construction, an unconditional eviction support of 100,000 Turkish Lira per independent unit will be given to property owners, tenants, and limited property right holders, provided that they reside/use the independent unit for eviction purposes.
Grant and loan support will be paid based on the construction progress level in the Building Inspection System for buildings subject to Law No. 4708, dated June 29, 2001. For other buildings, payments will be made based on inspections conducted by the relevant authority on-site. Payments will be made in three equal installments by the Urban Transformation Directorate, at the sub-basement level, upon completion of the structural system, and upon completion of construction, into a non-interest-bearing account opened by the contractor agreed upon by the property owners on behalf of the property owners.
Loan repayments will start from the first month after the grace period and will be completed in a maximum of 120 months, with the first 12 installments interest-free. At the end of the grace and interest-free period, an initial update will be made before the first installment payment. The loan debt will be updated by applying the update rate in each update period.
Loan repayments will commence from the first month following the interest-free period and will be completed within a maximum of 120 months, with the first 12 installments being interest-free. Before the first installment payment following the interest-free and grace period, an initial update will be conducted. The loan debt will be updated by applying the update rate in each update period. When determining the updated loan debt, repayments made from the loan debt will be deducted, and the remaining loan debt will be increased by applying the update rate, resulting in a new debt amount. The updated debt will be divided by the remaining number of installments to determine the monthly installment amount. This process will continue until the loan debt is fully repaid.
Income and credit score will not be taken into account
Income and credit scores of property owners will not be considered when providing loans.
The Urban Transformation Directorate will establish a mortgage on the property for an amount twice the credit amount, including first-degree and first-degree priority or unrestricted rights of use and other degrees.
If the ground and plan conditions of the parcel where the risky structure benefiting from the assistance for construction is located, or the parcel where the structure located in the risky area/reserved building area, are not suitable for reconstruction, the assistance for construction can be used with the consent of all independent unit owners within the building to be used within or outside the provincial boundaries suitable for construction owned by the property owners.
Within the scope of this decision, the grant commitment letter for the assistance for construction and the credit agreement can be made until December 31, 2026, within the budget opportunities allocated to the Istanbul Transformation Campaign Financing by the Urban Transformation Directorate.
Loan repayments will be monitored by the Urban Transformation Directorate. In the event of non-payment of the loan debt on time, the Directorate will issue a warning to the debtor and provide a grace period. If the loan debt is not paid within the given period, or if the loan is suspended or canceled, the unpaid portions of the loans disbursed will be pursued and collected according to general provisions.
In the areas where the activities and transactions are carried out by the Directorate, other aspects related to assistance for construction, including the financial limit set for grants remaining the same and not exceeding three times the financial limit set for loans, will be determined by the Minister of Environment, Urbanization, and Climate Change.
The minister will also be authorized to determine other issues regarding the provision of construction assistance to the right holders in urban transformation applications to be carried out within the scope of the Decree.
Statement from Minister Özhaseki
Minister of Environment, Urbanization, and Climate Change Mehmet Özhaseki stated on his social media account that the support package to be provided within the scope of the "Half of It's On Us" campaign for Istanbul's urban transformation has come into effect.
Özhaseki said, "In this context, with a total of 1.5 million TL support, including 700.000 TL grant, 700.000 TL loan, and 100.000 TL eviction support, we will accelerate Istanbul's urban transformation. We express our gratitude to our President, Mr. Recep Tayyip Erdoğan, who has always supported us. May it be auspicious for Istanbul and our citizens."
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