Overseas property investors are buying fewer properties in Turkey, despite a range of generous incentives to foreign purchasers and non-resident Turkish citizens.
The first quarter of 2017 saw overseas property investors buying 97,579 properties according to the latest figures released by the Turkish Statistical Institute. That figure represents a drop of 8.1 per cent when compared to the previous year.
Many overseas buyers appear to have been put off by political upheaval in the country, despite the government of Turkey offering many rebates and incentives including an exemption to foreign investors from paying 18 per cent value added tax on property purchase. The same exemption is also applicable to Turks who have lived and worked abroad for more than six months.
Of the properties sold to overseas property investors, Istanbul remained the most popular city with 18.4 per cent of all foreign purchases.
The capital city of Ankara recorded 10.4 per cent of the sales to foreign investors, while Izmar saw 6.2 per cent of purchases made by non-Turkish nationals.
Overseas property investors and Turkish residents based overseas must pay in foreign currency to buy property in Turkey, and are not allowed to sell the property for at least a year to ensure that they receive the exemption from value added tax.
Turkish citizenship has also been offered this year for the first time by the government in Turkey. To qualify, foreign investors need to buy real estate worth $1 million, make a fixed capital investment of at least $2m, or keep at least $3m in a bank account for at least three years, or create at least 100 jobs in the country.
This citizenship offer is proving to be more attractive to investors from middle east countries such as Iraq, Saudi Arabia, and Kuwait to take advantage of the close relationship Turkey enjoys with the EU.
For Western European based property investors, it seems that many are holding back to see what develops in the newly created dictatorship of Turkey.