Legal Basis: Law No. 6306 Article 7/6 | Implementation Regulation Article 16/7

This is the most frequently confused topic among the supports provided by the state during the urban transformation process: “Can I receive both monthly rent assistance and use an interest-subsidized loan?” The answer to the question is short — no — but the reason, scope, exceptions, and preferred strategy of this rule require a quite detailed evaluation. Article 7/6 of Law No. 6306 and Article 16/7 of the Implementation Regulation have explicitly prohibited the simultaneous use of rent assistance and interest support. This article addresses the legal basis of the prohibition, how it affects which right holder, how to decide between the two supports, supports that cannot be received simultaneously as well as supports that can be used together, and common mistakes made in practice with updated information for 2026. (Law Art. 7/6 — Reg. Art. 16/7)

Basic Rule: Both Cannot Be Received for the Same Independent Unit

Article 16/7 of the Implementation Regulation clearly stipulates this rule: Beneficiaries cannot simultaneously benefit from both rent assistance and interest support for the same independent unit. The subject of this prohibition is the simultaneity of the two supports used for the same property. (Law Article 7/6 — Regulation Article 16/7)

Paragraph 6 of Article 7 of Law No. 6306 outlines the legal framework for this prohibition: Those who benefit from rent assistance cannot benefit from interest support; conversely, those who benefit from interest support cannot benefit from rent assistance. These two supports are mutually exclusive; choosing one means waiving the right to use the other. (Law Article 7/6)

Why Does This Prohibition Exist?

The background of the prohibition stems from the primary purpose of both supports. Rent assistance is a grant-like, non-repayable support provided to help the beneficiary rent a property during the period until the structure is demolished and rebuilt. Interest support, on the other hand, is a support mechanism that provides an indirect cash contribution to the beneficiary by subsidizing the interest on a bank loan taken to cover the reconstruction cost.

Both supports serve the same purpose — alleviating the financial burden on the beneficiary during the transformation process. Instead of providing financial contributions to the same beneficiary through two channels, the state prefers the beneficiary to choose the channel more suitable for their specific situation. This approach also aims to extend limited state resources to a wider range of beneficiaries.

What is an Interest-Supported Urban Transformation Loan?

Understanding interest support correctly is essential for making the right choice. Beneficiaries under Law No. 6306 can use interest-supported loans through Ziraat Bank, Halkbank, or Vakıfbank for reconstruction. (Art. 7 of Law)

As of 2026, the main features of this loan are as follows: The loan term extends up to ten years; repayments begin two years after the building permit is obtained; no interest is applied in the first year repayments begin; in subsequent years, an update equal to half of the CPI rate is applied; the beneficiary’s income and credit score are not considered when applying for the loan. Payment stages are determined according to the progress of the construction: payments are made gradually at the start of construction, upon completion of the load-bearing system, at the plastering stage, and upon obtaining the occupancy permit.

With interest support, no cash goes directly to the beneficiary; the state reduces the beneficiary’s monthly loan installment by directly paying a portion of the interest burden to the bank. Therefore, while rent assistance offers a more tangible financial benefit for beneficiaries in need of cash, interest support can mean a much more significant amount in situations requiring large-scale construction financing.

Which Support is More Advantageous? Decision Matrix

The choice between the two supports varies according to the beneficiary’s financial situation, construction model, and project size. When making a decision, the following questions are decisive:

First question: How will the construction be financed? If a revenue-sharing construction contract has been signed and the contractor has undertaken the construction cost, the rightful owner does not need to use a loan; in this case, choosing rent assistance is much more logical. If an agreement has been made by way of commitment —that is, in a model where the rightful owner will pay the construction cost— an interest-subsidized loan can provide a greater financial advantage.

Second question: How urgent is the cash need? Rent assistance is deposited monthly into the rightful owner’s Ziraat Bank account and directly covers living expenses. Interest subsidy, on the other hand, reduces the installment burden in the long run but does not increase your immediate cash.

Third question: How large is the project and what is the construction cost? For a small structure, the total amount of rent assistance received for 18 months may be much less than the savings provided by interest subsidy in a large construction. For large structures and high construction costs, interest subsidy can make a significant difference.

To illustrate with 2026 figures: In Istanbul, the total rent assistance a homeowner will receive for 18 months varies between 162,000–189,000 TL. In contrast, for a large project, subsidizing the interest burden that will last for years with government support can easily exceed this amount. The choice requires a calculation specific to each rightful owner’s project.

Supports That Can Be Used Together

While rent assistance and interest subsidy exclude each other, some other supports under the scope of Law 6306 can be used together. Knowing this distinction is critically important for rightful owners to benefit from all their rights. (Law Art. 7)

Tax and fee exemptions can be used simultaneously with both rent assistance and interest support. Transactions within the scope of urban transformation benefit from title deed fee, stamp duty, and VAT exemptions; these exemptions remain valid regardless of which financial support is preferred. (Art. 7/9 of the Law)

The grant within the scope of the “Yarısı Bizden” (Half from Us) campaign, while being a separate support channel for Istanbul, whether it can be used together with rent assistance depends on the campaign’s current implementation guide and the district municipality’s assessment. It is recommended to confirm with the district municipality before applying.

IMM additional rent support can be received together with Ministry rent assistance; however, IMM support is an independent local support channel used in conjunction with Ministry support, and the rule for simultaneous use with interest support is subject to this support’s specific legislation. Nevertheless, in practice, IMM support is generally paid in addition to Ministry rent assistance. (IMM Council Decision 1277/12.11.2025)

Can an Entitled Person Applying for Interest Support Receive Rent Assistance? Relationship Between Periods

The inability to use rent assistance and interest support simultaneously also restricts switching between the two supports. The critical point from the regulation’s perspective is this: having applied for an interest-supported loan prevents applying for rent assistance. (Art. 16/7 of the Regulation)

This rule can particularly lead to a significant loss of rights in the following scenario: The entitled person first applies for an interest-supported loan, then their construction plans change or they enter into a revenue-sharing agreement with a contractor. In this situation, the right to apply for rent assistance may have been forfeited due to the previously made application for interest support. Therefore, making the choice decision before applying is critical.

Transitioning to rental assistance after using interest-subsidized credit: It is debatable whether one can apply for rental assistance after the interest subsidy period ends or after the entire credit debt is paid in practice. The regulation prohibits simultaneous use; regarding sequential use, since there is no clear provision in the relevant legislation, it is recommended to inquire about this matter with the Urban Transformation Directorate in advance.

Comparison of Durations and Current Figures

Seeing the fundamental parameters of the two support mechanisms side by side clarifies the decision-making process:

How is the Simultaneity Prohibition Applied for Tenants?

For tenants and holders of limited in rem rights, this rule takes on a different dimension. Tenants are entitled not to monthly rent assistance, but to a one-time relocation assistance. The relationship between relocation assistance and interest support is independent of the owner’s situation: Since tenants do not directly use loans, this prohibition usually does not directly apply to them. (Law Art. 16/3)

However, in some projects, financing models where the tenant is also a party might be involved. In such special cases, it is recommended to clarify the relationship between interest support and relocation assistance by asking the relevant institution beforehand.

Most Common Mistakes in Practice

Applying for interest support and then requesting rental assistance: Rental assistance requests from beneficiaries who have completed their interest-supported loan application are rejected. Order is important; the preference decision should be made before both applications. (Reg. Art. 16/7)

Opting for interest support in a land-for-share project: A beneficiary who has a land-for-share agreement with the contractor already does not have a construction financing problem. In this situation, interest support does not provide a significant contribution; rental assistance should be preferred. However, still applying for interest support eliminates the right to rental assistance.

Those who think rental assistance is limited to only 18 months may miss out on the risky area advantage. If the structure is within a risky area or a reserve building area, rental assistance can extend up to 48 months, so this long-term support might economically outperform interest support.

Thinking that interest support provides cash: The state does not directly pay the interest support to the beneficiary; it reduces the interest burden on the bank. For beneficiaries who need cash in hand, this mechanism does not substitute the monthly cash provided by rental assistance.

Questions to Ask Before Applying

Will my urban transformation construction be done on a land-for-share basis or by contract? If it’s land-for-share, choose rental assistance.

When does my cash flow need arise? If you have a monthly cash need during construction, rental assistance is more suitable; if long-term investment financing is required, interest support can be considered.

What will my construction cost be and what will the interest burden be? In large projects, interest savings may exceed the total amount of rent assistance.

Am I benefiting from the “Half of It Is From Us” campaign? If you are, confirm with the district municipality how the campaign conditions interact with rent assistance and interest support.

Am I in the status of a risky area or a risky building? Since structures in risky areas can qualify for rent assistance for up to 48 months, this situation can significantly alter the balance of choice. (Art. 16/1)

Practical Advice

Make your choice before both applications. It is not possible to switch to rent assistance after applying for an interest-supported loan. Seeking expert advice before making this decision prevents an irreversible loss of rights.

Calculate the monthly total of rent assistance. Compare the total of 18 months × monthly amount × possible IMM additional support + one-time relocation assistance (if there’s a tenant) with the total savings that interest support will provide.

Clarify the decision before signing the contract. It is important to specify which support will be utilized in the contract to be signed with the contractor and for the contract to be consistent with this preference.

Do not select the wrong support type in your e-Devlet application. On e-Devlet, “Urban Transformation Project Rent Assistance Application” and interest support application are different screens. Applying on the wrong screen may affect your right of choice; be careful.

Why is Expert Lawyer Support Necessary?

The choice between rent assistance and interest support is a financial decision worth hundreds of thousands of liras. As 2M Hukuk Avukatlık Ofisi, in the urban transformation consultancy process we provide across Istanbul, especially in Tuzla, we frequently witness losses of rights resulting from this decision being made without sufficient evaluation.

The combined evaluation of whether construction will be carried out on a flat-for-land basis or by commitment, which financing model will add more value to the right holder, whether the risky area status creates a 48-month rent assistance advantage, and how the supports under “Yarısı Bizden” (Half from Us) interact, can be done much more securely with the support of an urban transformation lawyer.

Submitting applications correctly, completely, and on time from a legal perspective also requires separate expertise. In case of a wrong choice, the avenues for objection and correction are limited. As an Istanbul urban transformation lawyer, we offer clients a comprehensive legal and financial evaluation before the preference decision to prevent loss of rights from the outset.

Evaluating whether administrative appeal or legal action is available against rejection decisions stating that rent assistance cannot be switched to after applying for interest support is also among the services we provide under urban transformation consultancy. 2M Hukuk Avukatlık Ofisi, serving as a Tuzla lawyer, is with you throughout the urban transformation process across Istanbul.

Conclusion

In accordance with Article 7/6 of Law No. 6306 and Article 16/7 of the Implementing Regulation, for the same independent unit, both rent support and interest-subsidized urban transformation loans cannot be utilized simultaneously. The rights holder must choose one of these two supports. Rent support is often more advantageous in build-for-share construction models and in situations requiring short-term cash; whereas interest support can provide a more significant contribution in projects requiring large-scale construction financing and where long-term interest savings are high. The choice must be made before both applications; after an interest support application has been made, the right to switch to rent support is forfeited. (L. Art. 7/6 — R. Art. 16/7)

This article has been prepared based on Law No. 6306 (Art. 7/6) and the Implementing Regulation (Art. 16/7), Ministry open data as of April 2026, IMM Assembly Decision No. 1277 dated 12.11.2025, and current source scans. Since support amounts and loan conditions may be updated annually, please confirm the current announcements of the Ministry of Environment, Urbanization and Climate Change before applying.