Transfer of Development Rights Finally Gains Legal Ground

Rapid urbanization in Türkiye, driven by socio-economic changes, increases the demand for new construction – especially in major cities facing high population density and pressure for urban regeneration. Urban planning efforts aiming to meet this demand must include not just new buildings but also public service areas like roads, parks, schools, and healthcare facilities to ensure healthy urban development.

However, because of limited land availability, planners often have to designate these public service areas on privately owned land. In such cases, the development readjustment share (“DRS”) (düzenleme ortaklık payı [DOP] in Turkish) mechanism under the Zoning Law numbered 3194 (“Zoning Law”) [i] comes into play: municipalities deduct a certain portion of private land to allocate space for public services without any compensation. The rationale behind this uncompensated deduction is that the implementation of a zoning plan, together with the creation of nearby public service areas, increases the overall value of the remaining land; thus, the landowner is deemed to be compensated through this appreciation in value. When municipalities reach the legal DRS limit, they must use expropriation, which imposes a heavy financial burden because they must pay expropriation compensation to landowners. In summary, municipalities have two primary legal mechanisms for creating public service areas: (i) allocating such areas for public services without compensation through the DRS mechanism, and (ii) expropriating privately owned land when the DRS limits are reached. In this article, we will focus on a third method, an alternative approach developed to complement these two mechanisms, to create public service areas without breaching legal limits for DRS or harming public budgets.

New regulatory amendments for developing alternative models while also protecting the principles of healthy urbanization have long been on the agenda. Finally, the long-awaited regulation came into effect: transfer of development rights. Simply put, transfer of development rights (“TDR”) allows the unused construction rights of one privately owned parcel to be transferred to another privately owned parcel. The transferred asset is not the land itself but the development rights granted to it.

In fact, TDR has been a planning tool used in the United States and several European countries. Türkiye has recently followed suit and introduced regulations on TDR to minimize interference with property owners’ ownership rights during planning processes and to reduce the public’s financial burden.

Below, we (i) introduce the concept of TDR, including its historical background, (ii) identify the parties involved in its implementation, and (iii) review recent legislative actions that clarify, and, to some extent, legalize the process, together with our analysis of the potential impact of this new regulation on urban planning practices.

Background

TDR is, as a matter of fact, not an entirely new concept in Turkish legislation. As a concept, it was already recognized and available under the Law numbered 2863 on the Protection of Cultural and Natural Assets (“Law No. 2863”) [ii] and the Law numbered 6306 on the Regeneration of Areas Under Disaster Risk (“Law No. 6306”), [iii] and only under specific conditions in exceptional cases. For instance, under Law No. 2863, this mechanism could be utilized when development rights were restricted due to the presence of registered cultural properties, conservation areas, or preservation-oriented zoning plans. In such cases, the affected development rights could be transferred to designated development zones as outlined in zoning plans. Similarly, under Law No. 6306, the exercise of TDR depended on whether the property was located within a risk zone, a reserve building area, or was classified as a risky structure.

However, although both laws gave the Ministry of Environment, Urbanization, and Climate Change (“Ministry”) the authority to determine the procedures and principles regarding the implementation of the transfer of development rights, the Ministry has not introduced any regulations so far. Due to the absence of secondary legislation setting forth the rules and procedures regarding its implementation, the TDR mechanism did not see significant practice in Türkiye.

While the concept of TDR was recognized under the aforementioned legislation, the Zoning Law itself never included a provision regarding TDR. However, despite the lack of a legal basis for TDR in zoning legislation until now, some municipalities in practice allowed TDR within their jurisdiction by inserting relevant clauses into the zoning notes of their development zoning plans (nazım imar planı in Turkish) and implementation zoning plans (uygulama imar planı in Turkish). Yet, since this practice lacked a legal basis, the courts have, unsurprisingly, frequently annulled such provisions when challenged.

Current Situation

Following years of uncertainty about the legality of the municipal acts concerning the TDR, the Law numbered 7534 Amending the Village Law and Certain Other Laws published on 12 December 2024 (“Omnibus Law”)[iv] has finally introduced the legal basis for TDR into the Zoning Law. Subsequently, the Ministry regulated the procedures and principles for the implementation of TDR through the Regulation Amending the Regulation on Land and Plot Arrangements (“Regulation”). [v]

Accordingly, when a privately owned parcel (“Transferor Parcel”) cannot fully or partially benefit from its construction rights because the zoning plan designates it as a public area or public service area, the Regulation now allows the transfer of the corresponding construction rights to another privately owned parcel (“Transferee Parcel”) in exchange for transferring the title of the Transferor Parcel free of charge to the relevant administration.

Areas owned by private legal entities that are designated as public and public service areas in the implementation zoning plan will first be allocated for public services by deducting the DRS under Article 18 of the Zoning Law; if the legal DRS limit is exhausted, areas owned by the public or the State Treasury (meaning the legal entity of the State concerning public administrations within the scope of the general budget) will be used. If the administration cannot acquire land through these two methods, or if it reaches the maximum legal allocation limit, it may implement the TDR.

Prior to this regulation, the main method for creating public service areas was expropriation when the limits of the DRS were exhausted. However, when the budgets of the authorities responsible for expropriation fell short, the expropriation processes stalled, leaving private landowners neither compensated nor able to use their properties. As a result, such landowners filed lawsuits against the authorities for unlawful possession, and courts often ruled in favor of compensation. With the introduction of TDR, the legislator aimed both to transfer public service areas into public ownership without financial burden on the administration and to prevent lawsuits related to unlawful possession.

Procedures and Principles Regarding Implementation

The transfer will only take place between privately owned parcels located within the same province, and the Transferee Parcel will be determined by the zoning plan decision of the relevant administration. To initiate the transfer, the owner of the Transferor Parcel or the institution providing the public service must submit a formal request, provided that both the owner(s) of the Transferor Parcel and the owner(s) of the Transferee Parcel approve the transfer.

For the transfer process, a valuation commission established by the administration must first conduct a valuation of both the Transferee Parcel and the Transferor Parcel based on the principles used for expropriation compensation. This valuation will form the basis of the transfer. The determined value will not be less than the average value set by at least two licensed real estate appraisal companies authorized by the Capital Markets Board. In addition, when determining the value of the Transferor Parcel, the value of the unutilized development rights shall be taken into account. However, the owner(s) of the Transferee Parcel and the owner or shareholders of the Transferor Parcel must agree on the valuations made and on the proposed TDR.

Other key procedures and principles regarding the implementation of TDR are as follows:

• If the entire development rights of the Transferor Parcel cannot be transferred, the administration and the owner of the Transferor Parcel will offset the value corresponding to the non-transferred rights, provided that this amount does not exceed 20% of the total value of the development rights;
• Additionally, all buildings and ownership rights on the Transferor Parcel will be transferred free of charge or abandoned free of charge in favor of the relevant administration or institution;
• As a result of TDR, and upon the free abandonment of the Transferor Parcel to the public, the administration will establish a new ownership status on the Transferee Parcel;
• In planned areas, the construction area based on the construction coefficient (emsale esas inşaat alanı in Turkish) on the Transferee Parcel may increase up to the maximum ratio specified in the zoning plan or its provisions, but in any case, not exceeding 30%; and
• The unit price per square meter of the Transferee Parcel shall not exceed that of the Transferor Parcel.

What Is Next?

Municipalities are now expected to include regulations on TDR in their zoning plan notes. This step will enable the implementation of development rights transfers.

The new regulations are expected to reduce the financial burden of expropriation on public authorities. It is also highly likely that there will be a decrease in lawsuits filed by landowners alleging unlawful dispossession without expropriation.

[i] Published in the Official Gazetted dated 9 May 1985 and numbered 18749.

[ii] Published in the Official Gazetted dated 23 July 1983 and numbered 18113.

[iii] Published in the Official Gazetted dated 31 May 2012 and numbered 28309.

[iv] Published in the Official Gazetted dated 12 December 2024 and numbered 32750.

[v] Published in the Official Gazetted dated 11 September 2025 and numbered 33014.