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Does Citizenship Regulation Attract the Investors?

Turkey has reduced required limits for foreigners to acquire Turkish citizenship to encourage investment, according to new regulations published in the country’s Official Gazette
The lower limit of fixed capital investments to acquire Turkish citizenship for foreigners is reduced to $500,000 from $2 million.
Foreigners who own real estate in Turkey worth a minimum $250,000, instead of $1 million, can avail Turkish citizenship.
The deposit requirement of minimum $3 million in Turkish banks is also lowered to $500,000.
The regulation also covers foreigners who deposit a minimum of $3 million in Turkish banks. A similar regulation applies to those foreign investors who hold government-issued bonds worth at least $500 million which are not diversified for three years.
Foreigners who generate jobs for minimum 50 people, — previous requirement was 100 people — also will be able to take Turkish citizenship, the gazette said

What will the government’s approach with this regulation gain to us in terms of foreign real estate sales?

Foreign citizens who purchase property in Turkey are mainly middle income group. The average purchase price of the properties registered in 2015 is 180.000 USD. This new regulation goals a different target group. There is a big difference between 180,000 USD and 1 million USD.

Will wealthy foreign investors be attracted to purchase property in Turkey after this regulation?

Examples in other countries?
Real estate is very major export item. It is relatively less dependent on outsourcing, has a high labor cost effect and both the foreign exchange and the product remain inside.
Currently, the same regulation applied in Europe is Southern Cyprus. Permanent residence permit with new property investment of 300,000 EUR and direct EU citizenship with real estate investment of 2 million EUR is being granted.

Spain, Portugal and Greece offer temporary residence permits (we do not have a lower limit for residence permits) in different amounts of 250,000 – 500,000 EUR, but they grant permanent residence rights and citizenship on condition of living 6 to 10 years.
Only Portugal is more flexible in this regard. Even if the investor doesn’t reside in the country, he can apply for citizenship after 6 years.

If we evaluate at these examples, 1 million USD seems to be a fair regulation. Even if we are not a member of the European Union, Turkey is a country that is much more attractive to GCC citizens especially in terms of nature, culture and opportunities for comfortable living. Considering the attitude towards foreigners in Europe over the last years, there will be a great demand especially from the Gulf countries.

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New Arrangement for Property Sales from Mockup

New arrangement for property sales from mockup has been announced. Accordingly, the buyer will be able to cancel contract from the contract date within 24 months without any justification. The buyer contract will pay compensation up to 8% against the cancellation.

Decree on the implementation of certain regulations within the scope of the State of Emergency was published in the Official Gazette and entered into force.

In this context, a new arrangement was also introduced for the sale of houses from mockup. Accordingly, the buyer will be able to cancel contract within 24 months from the contract date without any justification.

In case of cancelling the contract; the expenses arising from the taxes, fees and similar legal obligations arising from the sale or sale promise contract and 2% of the contract price for the first 3 months, 4% for the 3rd to 6th months, 6% for the 6th to 12th months, 8% for the 12th to 24th months from the date of the contract can be deducted from the refund by developer.

Previously, if the developer had the right to deduct 2% of the contract price in case of any cancellation.

RELATED REGULATION FULL TEXT

ARTICLE 8 – The first paragraph of Article 45 of the Law No. 6502 on the Protection of the Consumer, dated 7/11/2013 has been amended as “ninety days” in the following paragraph and in the third paragraph of the same article.

“(1) Up to twenty-four months from the date of the contract for the sale of prepaid housing, the consumer has the right to cancel without any justification. In case of cancelling the contract; The expenses arising from tax, duties and similar legal obligations arising from the sale or sale promise contract of the dwelling, as well as two percent of the contract price for the first three months from the date of the contract, four percent for three to six months, six percent for six to twelve months, And up to eight percent for twenty-four months deduction will be applied to refund regarding to the cancellation.

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Number of Property Sales in Istanbul Towns

Number of Property Sales in Istanbul Towns have been announced by TUIK for 2016. 4% increase is remarkable point comparing to 2015. Istanbul had come first with 17.3% which is 232.428 according to title deed records.

Foreign citizens have purchased 18.189 units in Turkey, ranking 5.811 in Istanbul, 4.352 in Antalya, 1.318 in Bursa and 871 in Aydin. Iraq(3.036), Saudi Arabia(1886), Kuwait(1744), Russia(1224) and Afghanistan(1205) citizens have been the leading countries in purchasing real estate in Turkey.

How many properties have been sold in which town of Istanbul? Esenyurt town is quite leading the sales with 40.436 units in the list. Sancaktepe town (Asia Side) is following with 11.885 units. Beylikduzu town is the 3rd most properties sold with 10.901 units.

Brief Information about leading towns.

Esenyurt

Esenyurt is a popular residential area due to the brand new properties and affordable property prices compared with Istanbul centre. Esenyurt is home to the Istanbul Esenyurt University, while being very close to Beykent University, Fatih University, Fatih University, Istanbul Arel University, Istanbul University and Istanbul Gelişim University. TUYAP Exhibition and Conference Centre is only 5km away from Esenyurt centre, while it is 26km away from the Istanbul Atatürk Airport. Shopping facilities are mainly gathered around shopping centres rather than individual shops along the streets. Esenyurt has three shopping centres, which are Eskule Shopping Centre, Torium Shopping Centre and Akbatı AVM.

Beylikduzu

Beylikduzu is populated especially after the 1999 Izmit earthquake by the people from older districts of Istanbul who preferred to move to newly constructed buildings in Beylikduzu because of their fear for safety of the old buildings. When the Metrobus (rapid bus system) is extended from Avcılar to Beylikduzu in 2012, Beylikduzu is affected by the second wave of migration. With the advance of Metrobus the perception of “distance” has changed and places which seemed far away before became closer, so many moved to Beylikduzu. Since the population of Beylikduzu consists mostly of migrants from other districts of Istanbul or Turkey and Beylikduzu is a relatively recently established city, Beylikduzu has gained a welcoming atmosphere for the newcomers without having any social stratification. The popularity of Beylikduzu has increased greatly in the last few years and the region became a hot spot for residential and commercial investments. Beylikduzu has the highest rapid increase in the land and property value in Turkey, making its investors richer in a very short time.

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