A key change for foreign property buyers in Turkey seeking citizenship could be on the horizon after it was announced that the minimum investment levels could be drastically reduced.
Turkey‘s Interior Ministry has announced a re-think on the issues surrounding the amount of money that real estate investors will need to have in the bank to be able to apply for Turkish citizenship.
In 2016, Turkey announced that to obtain citizenship, foreign residents had to buy real estate in the country which was worth at least $1 million and hold on to the property for at least three years.
Four other alternatives included property investors depositing at least $3 million for a minimum of three years; utilising at least $2 million as a capital investment; or generating employment for more than 100 people or buying up ‘state debt instruments’ worth $3 million and keeping them for at least three years.
The regulations were introduced at a time when there was a downturn in the number of foreigners’ buying property, and it was hoped the measures would help rake in an extra $1 billion for the real estate industry.
The financial threshold of the citizenship law – or the ‘golden visa’ as it was dubbed – was primarily aimed at Gulf countries, Russians or high-rolling Europeans.
Demand for real estate from Middle Eastern investors stayed stable throughout last year, but 2017 has seen massive interest, with foreign property sales in July 2017 increasing over 66 percent compared to the same month in 2016.
Of the 1,720 properties sold in July, more than a third were sold to residents from Saudi Arabia, Iraq and Kuwait.
Reflecting on the surge in interest, Environment and Urbanization Minister Mehmet Özhaseki said the Interior Ministry was now actively looking at the citizenship issue.
This follows a growing lobby within Turkey’s real estate sector suggesting the thresholds on the real estate limits should be decreased, so reinvigorating the industry further.
Industry representatives have said the $1 million minimum is too high and the government should be working to bring this down – even by as much as $500,000.
The issue was the main talking point at September’s Cityscape Global, a real estate exhibition in Dubai, which attracted 13 Turkish companies.
The event, seen as a major promotional opportunity for Turkey’s property industry, generated $1.2 billion in pre-orders and property investments in Turkey from Gulf buyers in 2016.
Mr Özhaseki, visiting Cityscape 2017 which welcomed 272 real estate companies from more than 80 countries, said that around 160,000 foreign citizens had invested in nearly 78,000 units of property, business premises and land since Turkey lifted the reciprocity law in 2012.
This law, when in force, had only enabled investors from certain countries to buy in Turkey as long those nations allowed Turkish citizens to buy property there.
The relaxation meant Gulf citizens could invest in Turkey, and since 2012, some 32,300 people had bought about 16,000 properties.
Mr Özhaseki said there had been a proportionate rise in the number of applications for Turkish citizenship as a result.
He commented that Turkey was among several countries endeavouring to attract ‘educated people’ from abroad. Hence the Interior Ministry’s review of the issue of citizenship.
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