The Progression of the Relaxation of the Rules
The Turkish real estate market didn’t originally allow international purchasers until 2002. However according to the “reciprocity clause,” only inhabitants of nations that granted Turkish citizens reciprocal rights, such as Britain, Germany, and the Netherlands, were permitted to own property, and they were only permitted to do so in a select few zones. The zones were eliminated in 2005, although reciprocity persisted.
After the reciprocity barrier was then removed in August 2012, citizens of 183 other countries have been able to purchase real estate in Turkey. Due to the reciprocity rules, citizens of China, Russia, India, and Gulf Arab states who had previously been prohibited are now permitted. The amount of land that foreigners can buy without a permit has grown from 2.5 hectares to 33 hectares.
Several foreigners have been successful in purchasing real estate in Turkey, particularly in the Marmara and Mediterranean areas, which are Turkey’s main financial and tourism destinations.
According to Abdurrahman Kaya, General Manager and CEO of Ideal Estates, “the rule lowering restrictions for foreigners to get Turkish citizenship, the volatility in the Turkish lira versus other currencies, and the VAT exemption for foreigners helped accelerate the sales.”
Since January 2017, Turkey has awarded citizenship to foreigners in a variety of ways. Including buying real estate valued at least $1 million USD. The government also implemented the following policies that year to encourage overseas buyers:
- The decrease of the 2% to 1.5% title deed costs charged by the Land Registry. Which are paid by both the buyer and the seller together (for a total of about 3%).
- VAT exemptions are available to buyers of Turkish real estate who do not reside in Turkey, provided they pay for the property in a foreign currency. Also, buyers must keep the property for a full year following closing.
- Stamp duty was cut for “promise to sell agreements” from 0.95% to 0%.
Current Status of the Regulations
In September 2018, new rules were announced that reduced the amount of investment needed to obtain Turkish citizenship:
- Nowadays, owning property worth at least $250,000 USD grants you citizenship.
- Keeping at least US$500,000 in a Turkish bank account for three years, which is a decrease from US$3 million.
- Creating 50 jobs, which is a decrease from 100 jobs.
The minimum barrier was increased from US$250,000 to US$400,000 starting on June 13, 2022. This occurred in the middle of a spike in foreign interest in purchasing property in Turkey.