Still Popular Despite the Minimum of Investment Rise
On June 14, 2022, the official increase in the minimum investment amount in the Turkey Citizenship Program (CIP) for real estate option from US $ 250,000 to US $ 400,000 was declared. The Turkey government announced the price increase and gave applicants a month before it was implemented. Now, many are wondering how this change will affect the program itself.
CIP Turkey has proven to be the most popular citizenship by investment program in the world, and tens of thousands of main applicants (exact details have not been released) and their family members have been granted citizenship in a very short period of time since the launch of the program in 2017. It is unlikely that a change in the required minimum amount of investment changes its status.
A Reasonable Price Increase
Ironically, it was the first change in the minimum investment amount for real estate, from $ 1 million to $ 250,000 in 2018, which made CIP Turkey popular. But this recent change is unlikely to have such an effect. In the end, there is only one major similarity between both price changes (price decrease in 2018 and price increase today). Both have logic.
The price reduction in 2018 matched the Turkey CIP with the rest of the options around the world, while it seems the current price is reasonable in terms of inflation, currency fluctuations and the natural growth of the real estate market in Turkey in general and in Istanbul in particular.
The $ 150,000 increase is also fully in line with inflation, and it makes sense given that the Turkey lira (TL) is constantly fluctuating. For Turkey real estate developers who conduct all their local and internal transactions in Turkey lira, the recent decline in their national currency should be reflected in Turkey citizenship by investment laws, which offer prices in US dollars.
This price increase offsets currency fluctuations as well as national and global inflation rates, but more importantly, reflects the growth of the Turkey real estate market.
The housing market in Turkey, and in particular in Istanbul, which is the most popular destination for investors in this program, continues to grow healthily and naturally. In fact, this market is so dynamic that reading an analysis of it is challenging.
Housing market analysts offer different rates of growth from year to year in Istanbul, but agree that the real rate is between 28% and 33% and that the Turkey real estate market is becoming one of the fastest growing in the world.
“This growth is a sign of the inexhaustible demand for real estate in Istanbul, a demand that the market can hardly meet. This price increase only reflects the true value of real estate in the market and is reasonable in the parameters of Turkey citizenship through investment,” expertly explains Taymour Polding, one of the founding partners of CIP Turkey:
“Istanbul Housing Market is one of the most dynamic markets in the world, which is similar to London and New York in terms of global attraction.” The main difference is that we are only witnessing its explosive growth.”
Polding went on to discuss the positive impact of this increase on Turkey citizenship applicants, noting that the Turkey citizenship program is exceptional in that applicants can actually make a profit by investing in their real estate, especially when they combine the annual ROI and eventual appreciation rates. Investors were spending several multiples of the minimum anyway.
Polding notes that profitability only works if the investment itself is reasonable, and finding top real estate in Istanbul for $ 250,000 “is simply no longer realistic.” “Note that for those looking to invest well in one of the most desirable housing markets in the world, the previous minimum of investment requirement was more of a means to an end than a smart move.”
“Most of our clients were never satisfied with the minimum, and instead bought top-tier real estate for twice, and sometimes even three times the minimum, because it was a good investment, not just as a way to get citizenship. “We have also seen a large number of clients looking for luxury property options in Istanbul and Bodrum worth millions of euros, so this program is also very popular among the rich of the world.”
Explaining why he believes the increase is in the interest of potential investors, Polding said: “Investors want something tangible and resellable to make a profit. You will not find good property in the heart of London, New York or Hong Kong for US $ 400,000, but you can in Istanbul, which is fast becoming one of the world’s most important economic centers. With the increase in minimum investment, the Turkey government has adapted investors to the better real estate options available in Turkey, and the popularity of CIP will continue to grow as they see their value for money improve.
Citizenship by Investment, With An Emphasis On “Investment”
Polding noted that the recent price change has had little effect on his current customers:
“The clients we are currently looking for are looking for the best that the Turkey market has to offer in Istanbul and Bodrum, and the price change has not affected them because they have already seen assets of greater value than the new ones.”
“Their main goal is to acquire citizenship by investments that benefit them financially, and the recent change has not made the slightest change in their mentality.”
The new law opens the door for Turkey citizenship applicants to use real estate options that were usually outside the $ 250,000 range, which could lead to even greater growth in the Turkey housing market and thus higher returns for those who buy now. In addition, Turkey offers something unique to CIP applicants, as the country itself is becoming a regional superpower, offering applicants a real second home.
Turkey Bar Association to Repeal The Law On Granting Turkey Citizenship by Investment
The Turkey Bar Association has called on the State Council, the country’s Supreme Administrative Court, to end its citizenship by investment program, which the association says “has no legal basis.”
The program has brought several billions of foreign direct investments and foreign currency reserves to Turkey in just a few years after opening. The government has recently increased its minimum investment from $ 250,000 to $ 400,000.
The Turkey Bar Association believes that the reform of the Turkey citizenship law by investment by presidential decree is unconstitutional because the country’s citizenship law and related regulations do not explicitly allow the granting of citizenship by investment.
“The Constitution of the Republic of Turkey emphasizes that the conditions for obtaining citizenship must be determined by law,” the statement said. The association described the concept of citizenship as “a legal and political bond and commitment to the state” and argued that conferring on it a particular financial value “abstracted the concept of citizenship and alienated it from its essence.”
This recent argument, which is a moral one, reflects more broadly the sentiments expressed by CBI opponents. Citizenship is somehow beyond a legal status and should not be a commodity.
Altogether, so far Turkey has offered the only citizenship program by direct investment without the need for significant residency, which gives investors the opportunity to live in a global economic and political power. The rest of the CIPs in the world are limited to countries with a population of no more than 650,000. Istanbul alone is home to more than 15 million people. The country has excellent infrastructure and outstanding financial services and has many opportunities to offer. On the other hand, there are always sudden legal changes lurking in any kind of foreign investment, and investors must always keep up to date with the news and legal issues of the countries in which they invest.
For more detailed information on the requirements for obtaining Turkey Residency by Investment, please contact one of our advisers in the UAE, Denmark, or Canada, we will accompany you and your family until you obtain Turkey residency.
If you have any questions or comments about Turkey Residency by Investment, you can share them with us in the comments section.