Turkey has recently undergone a highly anticipated election, causing significant excitement.
President Recep Tayyip Erdogan emerged victorious in Turkey’s recent presidential election, solidifying his rule for a third consecutive decade. On Sunday’s decisive runoff vote, Erdogan prevailed over his main opponent, Kemal Kilicdaroglu, the leader of the opposition. This significant electoral triumph ensures Erdogan’s continued leadership in the country.
Erdoğan’s electoral success will undoubtedly have far-reaching implications for various aspects of Turkey’s governance, including its economy, treatment of minority groups and refugees, its standing on the global stage and housing issues including its Citizenship by Investment program.
This political landscape brings uncertainty to the future of the Turkish Citizenship by Investment Program, a popular option for those seeking a second citizenship and the benefits of living in Turkey.
A bumpy road for the program
This was not the first tightening related to the program. In June 2022, the Turkish government has increased the amount that foreigners must invest in property to become eligible for citizenship in an effort to alleviate the country’s financial challenges.
Previously, foreigners needed to invest $250,000, but the new legislation requires a minimum investment of $400,000. The purchase must be made through a Turkish bank, and the property cannot be sold for three years. Foreign nationals who meet these criteria and their spouses and children under 18 will automatically receive Turkish passports. The government aimed to attract foreign investment, ease the current account deficit, and support the real estate and construction sectors.
However, concerns have been raised about the potential for soaring housing prices and the need for additional educational and social facilities to accommodate the growing number of foreign citizens. While offering citizenship through investment is common in Europe, some opposition lawmakers have called for a temporary ban on property sales to foreigners. The government is also urged to monitor the sector closely to prevent abuse and ensure strict regulation.
Potential closure
Today, against the backdrop of the widely anticipated recent election, reports indicate that the program may be at risk of closure. Several factors contribute to the potential closure of the Turkish Citizenship by Investment Program.
Economic considerations also play a role in the program’s uncertain future. While the program generates revenue for the government, critics argue that the costs outweigh the benefits. The influx of foreign citizens strains public services like education and healthcare, and increased competition in the job market makes it harder for locals to find employment. Additionally, rising property prices pose challenges for locals in affording housing.
Moreover, recent regulatory changes implemented by the Ministry of Environment, Urbanization, and Climate Change suggest a deliberate effort by the current government to introduce barriers for foreigners seeking Turkish citizenship through investment. These changes, effective since January 1st, 2023, include restrictions on purchasing high-value properties and limitations on Turkish companies with foreign shareholders.
An uncertain future
The government’s actions indicate a preference for controlling and preventing misuse of notarised sales contracts, potentially disrupting established business models and property rights. This may lead to a decrease in demand for luxury properties and a decline in acquisitions through the investment program, signalling a proactive approach toward potentially closing it.
While the exact timeline and certainty of the closure remain unclear, it is evident that the Turkish government is actively considering the concerns and evaluating the program’s future. As a result, individuals considering Turkish citizenship through investment are advised to act promptly to secure their participation in the program.
