Turkey to ease foreign owenership restrictions19/09/2011
Turkey to ease foreign ownership restrictions
19 September 2011
Turkey is planning to ease restriction on the purchase of real estate by foreigners, according to reports in the Turkish press this morning…
Legislation is being drafted that will remove the principle of reciprocity from regulations governing real estate sales, meaning that foreign citizens will be able to buy property in Turkey even if their own countries don’t grant comparable rights to Turkish nationals.
Currently agents and developers in Turkey can get around the legislation by helping their clients to set Turkish companies but the process is costly and is a significant barrier to sale according to Philip Skorochod, director of UPPI.
“The legislation will make a huge difference. At the moment it costs around two thousand [British] pounds to set up a company and it takes time. The whole process is off putting and is preventing us making sales,” he says.
Under the current arrangements, international buyers from relatively open countries such as the US, UK and Germany have no problem purchasing real estate in Turkey as their countries allow Turkish nationals to invest. The biggest opportunities will come from the Arab and Russian markets says Skorochod.
“Generally investors from the Arab world view Turkey both a safe haven and a place where there is no hostility towards them so this is where the legislation will have the biggest impact. It will also improve the Russian buyer market for Turkish real estate as the process is currently cumbersome when dealing with Russian buyers,” he says.
Although there is sometimes a difference between government announcements and actual policy the country has a strong economic reason to enact the legislation as the extra direct investment is badly needed to finance Turkey’s large current account deficit.
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