ANKARA –

 In conjunction with the return of the Turkish currency’s exchange rate to decline, high inflation and the approaching date of general elections, the Turkish government has amended the legislation governing the granting of citizenship to foreigners, after the dollar price approached 15 liras.

The Turkish government is trying, through decisions and direct intervention, to improve the exchange rate of the Turkish lira, which has lost more than 45% of its value since the beginning of last year, which has affected the living situation after the inflation rate rose to 61.14% at the beginning of this month, to set a new unprecedented record. 20 years ago, driven by rising energy and commodity prices in the wake of the Russian-Ukrainian conflict.

According to information obtained by the official “Anadolu Agency”, it was decided at the last Turkish government meeting to raise the value of the property to be purchased to obtain Turkish citizenship from 250 thousand to 400 thousand dollars, provided that it is not sold for 3 years, what are the reasons for making this decision and its repercussions on property sales For foreigners in Turkey, and what is its relationship to the economic situation in the country?

Causes and repercussions

The economic researcher at Ege University in Izmir, Muhammad Ibrahim, attributed the reasons for raising the value of real estate in order to obtain Turkish citizenship to the increase in foreign demand for Turkish real estate in recent years, which led to price inflation in light of the inability of supply to cover this increase in demand, and therefore The government aims to reduce foreign demand for Turkish real estate in the current period in order to control the rise in real estate prices.

Researcher Ibrahim told Al Jazeera Net, "The approaching elections is one of the reasons for the decision to raise the value of the property, as the government tends to restrict the presence of foreigners during the remaining period until the elections, because the opposition is exploiting this file against it, pointing out that there may be security reasons after the increase in the flow of foreigners towards Turkey, especially From Iraq, Iran, Ukraine and Afghanistan.

Ibrahim stressed that the decision will lead to a reduction in foreign demand for Turkish real estate with its entry into force, which will negatively affect the flow of hard currency towards the Turkish real estate market and thus the economy as a whole.

Real estate companies believe that the latest decision will not apply to real estate owners that were purchased for $250,000 prior to the decision being issued, but the matter requires the issuance of a special circular from the Land Registry and Land Survey Directorate.

According to economists, Ankara aims, behind the condition not to sell real estate for a period of no less than 3 years, to maintain the flow of funds into its economy, in which the construction boom in foreign funds has been a main driver for years.

The latest amendment came after the Turkish government had announced facilities for citizens of other countries to obtain citizenship in 2018, when it reduced the minimum required to invest in real estate that grants its foreign owners the right to citizenship, from one million dollars to 250 thousand dollars, before the decision to raise the amount to 400 thousand dollars. this week.

Real estate sales to foreigners in Turkey increased by 56.5% in January 2022 compared to the same period the previous year (Reuters)

real estate market

According to figures announced by the official Turkish Statistics Authority last February, real estate sales to foreigners in Turkey rose by 56.5% in January 2022, compared to the same period the previous year.

The authority stated that the citizens of Iran came first in terms of buying houses in Turkey during this period with 761 houses, out of 4 thousand and 186 properties that were sold in the same period. 2021, including 64 thousand and 500 dwellings (houses), and about 4 thousand plots of land, with an estimated value of 40 billion Turkish liras (the dollar is about 13.52 liras).

Director of Land Registry and Real Estate Survey, Mehmet Zaki Adli, said that the citizens of Iraq and Iran were at the forefront of foreigners buying real estate in Turkey last year, followed by citizens of Russia, Britain, Germany and Afghanistan, adding that the cities of Istanbul, Antalya, Ankara and Mugla are at the forefront of the Turkish cities that sell real estate to foreigners.

dollar investment

In addition to granting Turkish citizenship based on the purchase of real estate, the conditions currently applied - according to the January 2022 amendments - provide for a fixed capital investment of at least $500,000 or its equivalent in foreign currencies, or the purchase of a government debt instrument such as bonds. And treasury bills worth at least $500,000 or its equivalent in foreign currencies, in order to obtain Turkish citizenship.

The new regulation stresses the necessity of selling foreign exchange amounts to a bank operating in Turkey, and from this bank to the Central Bank before completing the transaction.

At a time when Turkish Finance Minister Nureddin Nebati promised that 2022 "will be the year of supreme gains," he added, during his speech at the Turkish Association of Independent Businessmen and Industrialists (MUSIAD), that Turkey will witness during 2022 the breaking of records and the implementation of the new economic model.