Real Estate-Linked Investment Migration Opportunities in Turkiye

Burak Demirel of Henley & Partners

Jul 27, 2023

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1. Could you please kindly tell us the brief history of the Türkiye Citizenship by Investment (CBI) program?

2. Why is real estate the most popular option?

3. Where and what are the most preferred real estate options in Türkiye, are there any incentives for foreign buyers?

Video transcript

1. Could you please kindly tell us the brief history of the Türkiye Citizenship by Investment (CBI) program?

The total size of the Türkiye CBI Program is roughly USD 3 to 4 billion. There are no statistics published by the government, so we are not sure about the exact number, but that’s our estimation. Türkiye CBI constitutes 15% of global investment migration programs. The program started in 2017, and in 2018 the investment amounts were reduced. The program was designed by the government itself. The most popular investment option is the real estate investment option, which increased to USD 400,000 from USD 250,000 in June 2022.

2. Why is real estate the most popular option?

The total market size of real estate transactions is about UDS 80 billion, and USD 10 billion of these investments come from foreign investors. The Turkish real estate market is very attractive and liquid for foreign investors already, regardless of the CBI program. Secondly, there are seven investment options in Türkiye for the CBI program and for all of these options, you have to convert into Turkish lira and keep your investments as Turkish lira for three years. Unfortunately, since 2018, the Turkish lira has been depreciating and none of these investment options are financially feasible to make a profit. For example, when you choose the bank deposit option, you have to convert USD 500,000 into Turkish lira and keep your funds as Turkish lira for three years. Currently, the inflation is higher than the financial returns and you are exposed to the risk of the Turkish lira for three years. However, if you make the correct real estate investment, the real estate investment will be a natural hedge against the risk of the Turkish lira. Also, real estate in Türkiye is not only a good investment opportunity, but it also provides lifestyle, access to good education, a good healthcare system, and a lot of business opportunities in Türkiye. Türkiye’s climate also makes it a great retirement destination for many European countries.

3. Where and what are the most preferred real estate options in Türkiye, are there any incentives for foreign buyers?

Foreign real estate buyers can be separated into different categories. So, CBI investors who want to obtain citizenship relatively quickly and do not need to use the property are looking at real estate as a vehicle to acquire citizenship. They prefer serviced apartments, as serviced apartments provide higher income with short-term rental and income in US dollars. They’re also hassle-free as there is a professional property management service provided. You can find serviced apartments in Türkiye in the USD 400,000 to USD 500,000 range. Real estate investors who would like to diversify their real estate portfolio prefer to buy commercial properties like warehouses and stores in shopping malls. These investors are looking for investment options over USD 1.5 million to USD 2 million. Also, there are lifestyle buyers who prefer to buy villas and luxury condos on the west coast of Türkiye, especially in Bodrum. The starting prices are usually over EUR 2 million, and they may go up to EUR 10 million. And yes, there are incentives for foreign buyers in Türkiye as well. If you are a first-time buyer in Türkiye as a foreigner, you are exempted from VAT. So, for example, if you buy a commercial property, the VAT would usually be 18%, and you would not be paying this VAT on top of the real estate price.

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