How much is the contractor’s guarantee in urban transformation, and on what amount is it calculated? Current guarantee rates and calculation method for risky areas, reserve areas, and risky plots.

In urban transformation, the amount of guarantee to be provided by the contractor varies according to the type and size of the project. There is no single answer to the question “How much is the guarantee?” because different rates apply for risky areas, reserve building areas, and plots containing risky structures. Moreover, the rates have been updated with amendments made in 2024 and 2026. In this article, we examine in detail on what amount and with what rates the guarantee is calculated.

On What Amount is the Guarantee Calculated?

The basis for the guarantee is the “estimated construction cost”. In other words, the guarantee is calculated not based on the sale value of the apartments or the land value, but on the approximate construction cost of the building. In risky areas, this calculation is made based on the construction area to be determined according to the existing zoning plan or the proposed zoning plan (Implementation Regulation art. 13/9-a). The estimated construction cost is calculated based on the estimated unit costs for construction published annually by the Ministry of Environment, Urbanization, and Climate Change.

Guarantee Rate for Plots with Risky Structures: 6%

The most common type of transformation is the demolition and reconstruction of a risky building on a single plot. In this case, the contractor undertaking the construction work must provide a guarantee to the Administration equal to 6% of the estimated cost of the construction before obtaining the building permit (Implementation Regulation Art. 13/9-c). This rate has been determined by the amendment published in the Official Gazette dated 13/12/2024 and numbered 32751; the previously applied rate was reduced to 6%.

For example, in a project with an estimated construction cost of 20,000,000 TL, the guarantee amount is calculated as 1,200,000 TL, which is 6% of this cost. This amount is deposited by the contractor into the accounting unit of the relevant municipality before obtaining the building permit (Implementation Regulation Art. 13/9-d). Regarding how the choice of guarantee and insurance is shaped according to the financing model, the article on which model is more advantageous in urban transformation can be reviewed.

Graduated Rate in Risky Areas and Reserve Building Areas

In risky areas and reserve building areas, a graduated rate is applied, decreasing based on the size of the construction area, instead of a fixed 6%. Accordingly, the guarantee is calculated based on 10% of the estimated construction cost for construction areas up to 50,000 m², 8% for areas between 50,000 and 75,000 m², 6% for areas between 75,000 and 100,000 m², and 4% for areas exceeding 100,000 m² (Implementation Regulation Art. 13/9-a and b). This graduated structure is designed to foresee a proportionate burden in large-scale projects.

The practical meaning of this difference is important: While a typical apartment transformation (risky plot) is secured with a fixed rate of 6%, in large projects within extensive areas declared as risky areas or reserve building areas, the graduated rate comes into play.

Can Guarantees Issued Before 2024 Be Revised?

According to the provisional article added by the amendment published in the Official Gazette dated 04/02/2026 and numbered 33158, guarantees given within the scope of building permits issued from 1/1/2024 onwards can be revised according to a 6% rate upon the request of the building contractor (Implementation Regulation Provisional Article 5). This means that contractors who have provided guarantees at a higher rate since the beginning of 2024 can benefit from the reduced rate by making a request. For all steps in the entire process, the all stages of the urban transformation process can be examined. For current approximate unit costs of construction, the Ministry of Environment, Urbanization and Climate Change and the Legislation Information System should be followed.

Frequently Asked Questions (FAQ)

How is the contractor guarantee calculated? The guarantee is calculated based on the approximate construction cost; the apartment sales value or land value is not taken as a basis (Implementation Regulation Art. 13/9-a).

What is the guarantee rate for a risky building? In parcels containing risky structures, the guarantee is 6% of the approximate construction cost (Implementation Regulation Art. 13/9-c).

Why might the guarantee be higher in a risky area? In risky areas and reserve building areas, a fixed 6% rate is not applied; instead, a progressive rate ranging from 10% down to 4% is applied depending on the size of the area (Implementation Regulation Art. 13/9-a and b).

Can previously provided collateral be reduced? Collateral in licenses issued from 1/1/2024 onwards can be re-regulated at a rate of 6% upon the contractor’s request (Provisional Article 5 of the Implementation Regulation).

Why is Expert Legal Support Necessary?

Accurate calculation of the collateral amount is crucial for both the contractor and the property owner. Collateral calculated based on an incorrect basis or an incorrect rate can lead to administrative disputes and blockages in the process in the future. Urban transformation is a multi-layered process where administrative law, real estate law, and contract law intersect, and even a single procedural error can lead to significant loss of rights. Therefore, it is of great importance to manage the collateral calculation and the legal process with an attorney specialized in the field.

2M Law Office (Att. Meryem Günay) as we provide services across Turkey, especially in Istanbul, where urban transformation is most intense; in Istanbul’s priority transformation districts of Tuzla, Pendik, Kartal, Maltepe, Ümraniye, Ataşehir, Kadıköy, Sancaktepe, and Küçükçekmece, as well as in Kocaeli’s Gebze and Darıca regions. As Istanbul urban transformation lawyers and Tuzla urban transformation lawyers, we offer legal support to rights holders and contractors in collateral calculation and administrative processes.