The measures transforming Turkey's property market
Foreigners have been able to buy property in Turkey since 1934, but it’s only during the last couple of decades that the government has really paved the way for foreign property investors. The Turkish government, recognising the value of attracting outside investment, is actively courting these buyers.
Before 2016, the most significant change was when the reciprocity requirement was abolished in 2012, allowing citizens of more countries than ever before to buy and invest in Turkish property. Today, citizens of 183 countries can buy property in Turkey, and despite recent uncertainty property sales have remained steady.
Recently, the government has introduced a number of measures to further increase the desirability of Turkish property to foreign investors.
1. Citizenship offered with property purchase:
If a foreigner buys property to the value of $1m or more, they can acquire Turkish citizenship. Buyers must keep Turkey apartments or villas for three years or more
2. Stamp tax has been abolished
Stamp duty for “promise to sell agreements” has been cut from .95% to 0%. This means a saving of almost $5000 on a $500,000 property.
Stamp duty arising from construction agreements, in return for revenue sharing has also been cut.
3. VAT exemptions
If you own a property in Turkey but do not live there you’re now exempt from paying the 18% VAT if you pay for your property with foreign currency. This represents a huge saving: $90,000 on a $500,000 property. Buyers must hold onto their properties for at least 12 months after purchase.
4. Land Registry fees have decreased
Under Turkish law, both buyer and seller pay fees to the land registry. Until the end of September 2017, this fee has been cut from 2% to 1.5%.
Redressing the balance
Property Turkey director Cameron Deggin says these positive moves will attract buyers.
“The Turkish property market experienced a slow down in the second half of the year, following the coup and some security concerns,” Deggin said. ‘These government measures should help redress the balance.”
Deggin said that the citizenship on offer for buyers of property valued at £1m or more would appeal to the wealthy Arab investors currently buying up luxury apartments in Istanbul.
“Last year we sold to a large number of Iraqi, Saudi and Kuwaiti buyers,” he said. “This year looks even more promising in this regard.”
Another draw for foreign buyers is the low Turkish lira, Deggin pointed out. While the lira is now holding steady against the dollar, it’s still 17% lower than it was a year ago, offering currency discounts which are vastly appealing to buyers circling the expensive Istanbul market.