Turkey has reduced the limits for foreigners to acquire Turkish citizenship to encourage investment, according to new regulations published in the country's Official Gazette yesterday.
Accordingly, foreigners who own real estate in Turkey worth a minimum $250,000, instead of a previous limit of $1 million, can now avail Turkish citizenship. Turkey's housing sales to foreigners have presented an upward trend since 2012, the year when parliamentary law made it easier for foreign investors to purchase real estate in the country.
Even though the amendment which offered citizenship to foreigners via four types of investment choices, including a real estate investment of $1 million had contributed to increasing real estate sales to foreigners last year, the representatives of leading real estate providers on a number of occasions emphatically suggested that the $1 million bar should be reduced on the grounds that it will further hike sales and foster the construction sector.
According to the new regulation, the lower limit of fixed capital investments to acquire Turkish citizenship for foreigners has been reduced to $500,000 from $2 million.
The regulation also covers foreigners who deposit a minimum of $3 million in Turkish banks. The deposit requirement of minimum $3 million in Turkish banks is also lowered to $500,000. A similar regulation applies to those foreign investors who hold government-issued bonds worth at least $500,000 which are not diversified for three years. The minimum requirement was $3 million for government bond holding foreigners. Foreigners who generate jobs for a minimum 50 people, the previous requirement was 100 people, will also be able to apply for Turkish citizenship, the Official Gazette said.
Commenting on the new regulation, Babacan Holding Chairman İbrahim Babacan stressed the regulation is of great importance to reach the correct level in foreign residential sales in the real estate and construction sectors. He said due to the introduction of new regulations on granting Turkish citizenship to foreigners, a significant increase can be achieved at this point in foreign residential sales. Pointing out that the real estate and construction sectors have serious foreign investor potential exceeding $10 billion, according to estimated figures, Babacan suggested that the new regulations are critical for increasing the ratio of foreign investors.
Real Estate Investment Companies Association (GYODER) Chairman Assoc. Dr. Feyzullah Yetgin, on the other hand, said they have expressed at every opportunity that all regulations to pave the way for the sector should be made urgently.
Yetgin said granting citizenship rights to foreign investors in real estate is a method applied to attract foreign investors and encourage residential sales in many countries such as Spain, Portugal, Canada and Greece. "$1 million is not a small amount of investment for real estate. Foreign investors who have invested in real estate in Turkey have so far preferred an investment range of around $100,000 to $300,000. With the new regulation, we should aim to attract more investors in the upper segment," he said.
"Moreover, an advantageous situation has emerged for those with income exchange. As a result of these developments, foreign residential sales rose by 23.15 percent to 11,816 units in the second quarter of 2018 compared to the same period the previous year," Yetgin added.
"I believe that facilitating the requirement to grant the right of citizenship to foreigners who buy property will contribute in attracting more foreign investors to our country and increasing residential sales. This regulation, long expected by the real estate sector, will encourage foreign investors and strengthen the hand of the sector," he added.
