Despite the closure of several Turkish districts for residency permits and the increase in the minimum investment for citizenship from $250,000 to $400,000, there haven't been many significant changes in the past year and a half. However, there have been numerous small but impactful updates, particularly in compliance with Turkish laws.
Let's discuss those changes directly affecting new homeowners and prospective real estate buyers in Turkey.
Content:
- Accelerated citizenship: future prospects
- Residency permits: new nuances
- Entry ban durations in Turkey following residency permit denial
- Renting in Turkey: current trends and regulations
Accelerated citizenship: future prospects
Previously, politicians from various parties often discussed limiting foreigners' rights to buy property, citing excessive purchases driving up prices of real estate in Turkey and making homes unaffordable for locals. Now, a new proposal suggests replacing the “citizenship through investment” programme with a five-year “Golden Visa,” similar to other countries. Under this proposal, foreigners can still freely buy property, but it won't guarantee a Turkish passport. The level of backing this initiative receives and its potential to become law remains unclear. However, since 2017, nearly 36,000 foreigners have obtained Turkish passports through the current programme.
Residency permits: new nuances
The positive update is that residency permit appointment waiting times have become shorter. Previously, securing an appointment (known as “randevu” in Turkey) could take weeks or months, but now the online system enables quicker scheduling, even in foreigner-heavy areas like Antalya and Alanya. However, the system now automatically assigns dates and times, and you can only reschedule once. Two instances of no-shows or cancellations result in a six-month suspension of your right to apply for a residency permit. This change aims to prevent agencies from hoarding appointments to resell them. Overall, Turkey's official systems are slowly becoming more transparent, which is generally positive but not always convenient.
An unconfirmed change, widely discussed, involves reopening previously restricted areas for residency permits, particularly in Alanya. This comes as the percentage of foreigners with residency permits in Antalya province has dropped from the maximum 25% to more acceptable levels. Official statements are awaited.
Finally, not a “new” update but important information: many don't know that if your residency permit application is denied, you can get a refund of the card fee. Previously, applicants were told refunds were impossible, like visa applications. However, you can claim a refund by keeping a copy of the payment receipt and visiting the tax office with a Turkish bank account. Unfortunately, the cost of the mandatory insurance for the residency permit is non-refundable.
Entry ban durations in Turkey following residency permit denial
While there's nothing new to report, it's worth reminding: if a foreigner is denied a residency permit, they have 10 days to leave Turkey. Overstaying for a few days or weeks isn't too serious, provided you pay the fine issued at border control when leaving the country (the fine must be paid in Turkish Lira, so ensure you have enough cash). However, if you plan to reapply for residency later, it's not advisable to overstay many months.
The ban durations in case of overstaying are as follows:
- overstay of six months to a year: 3-month ban;
- overstay of one to two years: 1-year ban;
- overstay of two to three years: 2-year ban;
- overstay of over three years: 5-year ban.
It's crucial to note that if you fail to pay the fine upon departure, even for a short overstay, the ban can be significantly longer, potentially lasting several years. So, be cautious.
Moreover, since October 1, 2023, Turkey has implemented “Mobile Migration Control Points” (Mobil Göç Noktası). This system was first trialed in Istanbul during nine weeks and is now being rolled out in other major cities like Ankara, Bursa, and Izmir, with smaller towns to follow. By December 1, it will be operational nationwide. Foreigners can be asked to show their documents at any time, and mass checks are likely at street festivals, football matches, and other crowded events. In its initial weeks, the Turkish Ministry of Interior identified and deported over 105,000 migrants with expired residency permits.
If you're wondering where it's easiest to obtain residency through property purchase, especially a quality apartment in Turkey in a good area with all necessary infrastructure, we recommend Mersin among the resort cities.
Renting in Turkey: current trends and regulations
In Turkey, the number of homeowners has decreased from 62% to 57.5%. This ranks eighth among European countries in terms of the proportion of citizens owning real estate. Romania leads with almost 95% (94.8%), followed by Slovakia (93%), Croatia (91.1%), and then Italy, Greece, the Netherlands, France, and Turkey.
Despite this, fewer people can afford to buy property. Meanwhile, difficulties with renting continue due to ever-increasing rental rates.
What's new in this area: firstly, a “tax on vacant housing” is likely to be introduced soon, similar to some European countries. Owners of more than one apartment will have to pay this tax if their properties are not rented out, occupied by themselves or relatives/friends, or listed for sale.
The second significant legislative change, already announced, is the tightening of control over short-term rentals. This is related to the government's efforts to bring the tourist rental market out of the “grey” and “black” areas, increase tax revenues, and minimise fraudulent transactions. Additionally, properties initially purchased for personal use and residence are causing price dumping in the hotel market and reducing the occupancy of Turkish hotels. The Hoteliers Association has protested and sent several documents to the government demanding urgent action.
The number of unregistered apartments and houses in Turkey rented out for short periods has significantly increased in the last one and a half to two years, amounting to hundreds of thousands.
Consequently, the “100-Day Rule” law has been enacted, which the President of the Association of Tour Operators and Hoteliers (TÜROB), Muberra Eresin, describes as “a very important step in preventing undue profit and, more importantly, for safety and hygiene reasons.” This document was approved by the Planning and Budget Commission.
Key points of the law:
- An apartment or house can be leased for short durations, with an annual cap of 100 days.
- For an apartment in a complex, the consent of all neighbours in the building is required, not just 90% or a majority.
- All tenants must be registered with the police.
- A special licence from the Ministry of Culture and Tourism is required for renting out property, and access to this licence must always be available to inspectors.
- It is strictly prohibited to rent a property for a long term and then sublet it for short periods.
Penalties for violations are severe: the first case – TL 100,000 ($3,550), repeated violation – TL 500,000 ($17,755), and more for subsequent violations. The property can be sealed, and tourists can be evicted and fined.
Misleading the Ministry of Culture (providing false or incorrect information) incurs a fine of TL 50,000 ($1,775).
After receiving a sanction, the owner has two weeks to correct all errors, if possible.
Control mechanisms are still underdeveloped, and inspections are not yet widespread. However, owners accustomed to renting out apartments via word-of-mouth, AirBnB, and other aggregators should be cautious. If you wish to continue short-term rentals, consult experienced real estate specialists.
Finally, the tax rates for renting out residential property in 2023 are as follows, with a progressive scale from 15% to 40%:
- income up to 22,000 TL – 15%;
- from 22,000 to 49,000 TL – 3,000 TL plus 20% on the amount above the mentioned sum;
- from 49,000 to 120,000 TL – 27%, and so on.
The continuation will follow; the second part will cover news about using cars and mobile phones, as well as payment rules.