The level of property investment required to obtain Turkish citizenship is expected to plummet after a disappointing take up by overseas property investors.
The Turkish citizenship incentive for foreign investors was first introduced in January 2017, allowing foreigners who buy properties worth at least $1 million and keep them for at least three years to be entitled to Turkish citizenship.
At the same time the Turkish government scrapped title deed fees and reduced the value added tax on real property sales until September 2017.
However, despite foreign investors purchasing over 22,000 properties in Turkey during 2017, the Turkish citizenship incentive appears to have failed to lure the hard currency amounts that Ankara expected.
According to Central Bank data, the amount of foreign exchange that entered Turkey via realty purchases stood at $4.64 billion in January, an increase of only $750 million from $3.89 billion in January 2017, when the citizenship incentive took effect amid expectations that it would bring in at least $10 billion in foreign exchange.
Subsequently, the Turkish government is now considering lowering the $1 million qualification bar to just $300,000, along with other proposals to simplify red tape on title deeds and licences.
It is thought that the changes could be legalised as soon as this month, greatly reducing the amount of property investment required to obtain Turkish citizenship.
Head of the Association of Real Estate and Real Estate Investment Companies (GYODER), Feyzullah Yetgin, said: ‘The move would help significantly both the Turkish economy and the real estate sector. Homes worth $1 million and more account for only 2-3 per cent of the market. Our surveys indicate foreigners opt [mostly] for homes in the range of $100,000-$300,000.
Yetgin estimates that real estate sales to overseas property investors could reach up to $8 billion this year, helped also by the depreciation of the Turkish lira, which has increased the purchasing power of foreigners in Turkey.