The Erdogan government responds to housing unaffordability by raising the price of foreign citizenship investment.
The Turkish government plans to help the country’s finances by raising the price of citizenship by investment for foreigners. It is expected that the measure will help Turkey reduce its current account deficit and change foreign perspectives.
Foreigners may only seek Turkish citizenship by investing $250,000 until June 3.
After June 3rd, any foreign national must purchase real estate worth at least $400,000 to be eligible for Turkish citizenship.
The funds should be put in a Turkish bank, and the residence should be held for three years before being sold.
Foreigners who meet this requirement are automatically given Turkish passports, along with their spouses and children under the age of 18.
Foreigner housing purchases are projected to help Turkey’s real estate and construction industries.
The budget deficit in Turkey tripled in April compared to the previous year, reaching 50.2 billion liras ($3.23 billion). The country also had a $5.5 billion current account deficit.
Foreigners who contribute at least $500,000 (or the equivalent in another currency) to a private pension scheme and stay for three years are also eligible for Turkish citizenship.
According to the modified law, foreign businesses that create 50 jobs in Turkey or who deposit $500,000 in Turkish banks without withdrawing it for three years can also obtain Turkish citizenship.
The new law will take effect on June 13th.
At the moment, Russians, Ukrainians, and people from the Gulf are the most active buyers on the Turkish real estate market, especially in Istanbul and tourist towns in the south.
In March, Russians established a record number of businesses: 64, quadrupling the number from the previous month.
Official numbers show that the number of homes sold to foreign buyers in Turkey went up by 58% each year. With 1,152 homes, Russians topped the list of international buyers. Following them were Iranians and Iraqis, who purchased 905 and 714 homes, respectively.
Turkish banks have begun creating ruble-based accounts in order to boost sales.
Residential property sales to foreigners climbed by 49% from January to April, hitting 20,791 units.
Over the last four years, the amount of investment required for citizenship has been cut from $1 million to $250,000, resulting in increased demand for Turkish citizenship. However, increasing it to $400,000 will raise the visibility of foreign investors in Turkey.
Experts warn that foreigners’ growing interest in the Turkish real estate market risks driving up property prices to uncontrolled heights.
The drop in the value of the Turkish lira has also made Turkey’s real estate market more appealing to foreign investors.
The growing number of foreign children as a result of Turkish citizenship investments also requires new educational and social facilities.
The head of the World Tourism Forum Institute, Bulut Bagci, says that becoming a citizen by investing is common in Europe, and Turkey has chosen to follow this path.
“Compared to the similar cases in Europe, especially in the UK, this amount is still low. However, it will support tourism in Turkey and increase tourism revenues, because people who buy a house will visit the country frequently and go to the touristic destinations,” Bagci told Arab News.
But last month, some MPs from the opposition brought a motion to parliament asking for a temporary stop to property sales abroad.
According to Bagci, foreign nationals who obtain Turkish citizenship should be encouraged to participate in the tourism industry by purchasing hotels and other facilities.
After the government announced a new plan to make house loans cheaper, President Recep Tayyip Erdogan said that property prices in Turkey should be closely watched.