Turkey revises citizenship conditions in order to support the lire

The Turkish government has updated its regulations which grant citizenship to foreigners in exchange for a certain amount of investment or the acquisition of real estate, in the last step of authorities’ efforts to support the Turkish lira.

Foreigners can become citizens if they own real estate worth at least $ 250,000 for three years or if they make an investment of at least $ 500,000 or hold Turkish debt of an equivalent amount. during three years.

Foreign currency obtained from the sale of the property to foreigners will now be sold to the central bank through a local bank and converted to lire, according to the new regulations, published in the Official Gazette on Thursday.

The amount that foreigners keep in a local bank for investment purposes will also be converted into local currency, he said. The regulations require that the money be held in lira deposits or government debt securities and must remain in the country for at least three years.

In addition, the minimum amount of investment required to acquire citizenship has been defined as the dollar equivalent of another foreign currency.

The regulatory update comes after the pound fell after the central bank cut its policy rate by 500 basis points to 14% from 19% since September.

The currency fell to a record high of 18.4 per dollar last month, before seeing a massive rebound after President Recep Tayyip Erdoğan unveiled a deposit system that offers to compensate savers for losses suffered due to depreciation during the term of the deposit.

The latest app aims to prevent and reverse the trend of dollarization in the country, said Ömer Faruk Akbal, president of the Real Estate International Promotion Association (GIGDER).

“This is the right decision in terms of strengthening the Turkish lira,” Akbal told the Dünya business daily.

Still, he said serious preparations need to be made regarding the principles of application. “We expect that foreign investors who have Turkish lira in their hands will have no obstacle to taking advantage of the relevant law and that the question of how they should carry out their investments will be clarified with circulars. or directives to be prepared by the competent institutions. . “

“We export $ 19 million worth of real estate every day. Therefore, there should be no loopholes in the process, ”he noted.

Those eligible for citizenship include foreigners who, according to the Ministry of Industry and Technology, have invested at least $ 500,000 in the country or have spent at least $ 250,000 on the property and held that property for at least $ 500,000. at least three years.

It also includes foreigners determined by the Ministry of Labor and Social Security to employ at least 50 people, those who have deposited at least $ 500,000 in Turkish banks and kept there for at least three years, those who have purchased and kept for three years at least $ 500,000 in government debt, or those who have made a purchase of venture capital or real estate funds of at least $ 500,000.

Ankara adopted the Household Citizenship Program in 2017. A year later, it reduced the minimum price to $ 250,000, from $ 1 million, to attract foreign buyers.

Some 7,000 foreigners obtained citizenship through the purchase of homes between 2017 and 2020, the government announced last year.

Foreign home sales – mainly to Iranians, Iraqis, Russians and Afghans – hit a record monthly level in November, official data showed, also taking 11-month sales to their highest level on record, the depreciation of the pound having made Turkish property. more attractive to foreign buyers.

Sales to foreign buyers jumped 48.4% year-on-year in November, and the 7,363 properties sold marked the highest monthly level since the data series began in 2013.

Sales to overseas were strong throughout the year, increasing 39.4% in the first 11 months to 50,735 units, exceeding the annual threshold of 50,000 for the first time.

The industry is estimated to have completed 2021 at a level of up to 57,000 units. The previous annual record was set in 2019, when 45,483 homes were sold to foreigners.

Last year, net foreign investment in real estate stood at $ 5.7 billion, according to central bank data.

They had purchased around 40,812 homes throughout 2020, a 10.3% year-over-year decline from 45,483 units in 2019. This is still the second-highest annual figure on record. checked in.

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