Dolmabahçe Palace was ordered by the Empire's 31st Sultan, Abdülmecid I, and built between the years 1843 and 1856. Previously, the Sultan and his family had lived at the Topkapı Palace, but as the medieval Topkapı was lacking in contemporary style, luxury, and comfort, as compared to the palaces of the European monarchs, Abdülmecid decided to build a new modern palace near the site of the former Beşiktaş Sahil Palace, which was demolished. Hacı Said Ağa was responsible for the construction works, while the project was realized by architects Garabet Balyan, his son Nigoğayos Balyan and Evanis Kalfa (members of the Armenian Balyan family of Ottoman court architects).
The construction cost five million Ottoman gold lira, or 35 tonnes of gold, the equivalent of ca. $1.5 billion in today's (2013) values. This sum corresponded to approximately a quarter of the yearly tax revenue. Actually, the construction was financed through debasement, by massive issue of paper money, as well as by foreign loans. The huge expenses placed an enormous burden on the state purse and contributed to the deteriorating financial situation of the Ottoman Empire, which eventually defaulted on its public debt in October 1875, with the subsequent establishment in 1881 of financial control over the "sick man of Europe" by the European powers.