Turkey Takes Undeveloped Land Off The CBI Menu Amid Rumors of Big Changes

Siren Chen
Shenzhen

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The Turkish Citizenship by Investment program, launched in 2017, has undergone several policy changes in its seven-year existence:

• In January 2017, Turkey enacted a citizenship-by-investment law, allowing individuals to invest $1 million in real estate and $3 million in deposits for a three-year term to qualify for citizenship. Nine months and a disappointingly low number of applications later, the government announced its intentions to drastically “rethink” the program.
• In September 2018, after a year and a half of a lukewarm response, the government reduced the investment amounts to $250,000 for real estate and $500,000 in deposits for citizenship eligibility. As a consequence, Turkey received nearly 10,000 applications in the following year.

This surge, in turn and over time, prompted the government to implement gradual restrictions:

• In June 2019, the initial residence card validity was reduced from two years to one.
• In January 2020, the property transfer tax in Turkey increased from 3% to 4%.
• In July 2020, the program stopped accepting English names for citizenship applications, among other restrictions.
• In March 2021, the government further restricted real estate investment option, disallowing the re-use of the same property in another citizenship application.
• In January 2022, the government mandated the conversion of applicants’ US dollars into Turkish lira for the deposit and real estate routes, causing significant disruption due to the volatile exchange rates.
• In June 2022, the government raised the property investment minimum from $250,000 to $400,000.
• In December 2022, the government stopped allowing partial ownership of properties for citizenship applications, impacting shared ownership hotel projects.
• In February 2023, the government mandated that applicants physically visit Turkey during the residence application stage, ending the fully remote nature of the program.

Finally, last week, unconfirmed but widely disseminated reports suggested that, starting from January 1st, the property investment threshold for the Turkish CIP will once more rise, this time from $400,000 to $600,000.

Yesterday, the Turkish government released an amendment to the Regulation on Amendments to the Regulation on the Implementation of the Turkish Citizenship Law (Decision Number: 7938), with an effective date of December 11th. This amendment revises the citizenship law once again and concurrently implements changes without any buffer period. The modification specifies that the real estate investment option for Turkish citizenship cannot directly purchase undeveloped land without a building permit.

What impact will this amendment have on the market?

Considering the perennial absence of statistical reports from the Turkish CIP, we can but rely anecdotal data: Since 2018, when I first got involved with the program, approximately 55% of our clients have opted for the real estate investment model, primarily due to its relatively lower investment threshold compared to the deposit route.

In my six years of processing clients for this program, I have never encountered a single client choosing to purchase undeveloped land without a building permit for citizenship investment. In other words, this new rule is unlikely to phase any significant number of applicants.

IMI Pros who can help with Turkish Citizenship by Investment