Buyers who plan to obtain an Ikamet residence permit on the basis of owning real estate in Türkiye will be affected by the innovations. According to the internal order of the migration service, fr om October 16, 2023, the minimum cost of housing, according to expert assessment, $75,000, was raised to $200,000, already at the cadastral value in TAPU.
What has changed with a residence permit in Türkiye
Previously, there was no minimum cost, and all owners could apply for a residence permit. Later, the minimum required cost of $75,000 ($50,000 for small cities) according to expert assessment was accepted for holders of TAPU received after 04/26/22 for the purpose of applying for a residence permit.
Now, in TAPU received after 10/16/23, the cadastral value of the property must be at least $200,000 so that the owner can apply for a residence permit.
Important nuances of obtaining a residence permit under TAPU in Türkiye 2023-2024
We are talking specifically about the cadastral value of $200,000 in the TAPU document on property rights, and not about an expert assessment of real estate.
It is important that only one owner should be indicated in the TAPU, who will receive a residence permit for this property. His spouse and children under 18 years of age will apply for a tourist residence permit.
If there is shared ownership in TAPU for several people problems may arise with obtaining a residence permit for the owner of the property. In this case, the owners can be given a tourist residence permit.
What is the nuance, what is the difference between a residence permit under TAPU and a tourist one? Firstly, tourist Ikamet is short-term. Secondly, after 5 years of extending a tourist residence permit, you cannot apply for Turkish citizenship. This opportunity is only available if the residence permit under TAPU is continuously renewed for 5 years in a row.
Conclusions: those who plan to purchase an apartment for a residence permit should apply for a TAPU for one person. The same applies to the purchase of an apartment for further application for citizenship: there must be one owner in TAPU. Spouse and children under 18 years of age will also be able to apply as first-degree relatives.
Real estate without a TAPU, that is, an apartment or villa under construction, is not suitable for applying for a residence permit.
Real estate must be intended for residence, not commercial purposes; land plots are also not suitable for a residence permit, unlike citizenship.
There are also areas wh ere real estate is not suitable for obtaining a residence permit. Although you can buy holiday property there without any problems. We also remind you that the region does not matter for obtaining citizenship.
What potential property buyers in Türkiye should expect in 2023/2024?
There will be a noticeable shortage of housing that is suitable for a residence permit and has a cadastral (not market and expert) price of $200,000 or more. Such options will be available in premium new buildings and projects with large high-cost apartments.
On the secondary housing market, not all apartments will qualify for a residence permit. The fact is that owners who own real estate for less than 5 years and sell it must pay income tax. Profit is considered to be the difference between the current sale price and the value of the property that was officially indicated in the TAPU earlier.
The tax is calculated on a progressive scale based on the difference in cost. If the apartment has been owned for more than 5 years, then only the standard tax of 4% of the cadastral value remains, which, as a rule, is paid by each buyer.
Will the changes affect the real estate market?
Of course they will have some impact. But it is important to take into account that up to 10% of real estate is purchased under a residence permit, the rest of the housing serves as a family second home by the sea, or is intended for rental or investment. Not everyone needs a residence permit; many consider Türkiye for a holiday near the sea, and not for permanent residence. Visa-free days for vacation are quite enough for them.
It is also important to note that real estate residence permits are available in a small number of countries, and the minimum cost of such real estate is usually above $200,000.
You need to take into account not only prices per square meter, but also money laundering, taxes, and the cost of living in the country. Türkiye, in all respects, continues to be one of the most affordable options. Türkiye does not ask about the source of finance for the purchase of an apartment. For many buyers this is an important point to legalize a large amount for the purchase of real estate. Especially in EU countries.
Municipal elections are coming up in Türkiye in March. The situation with inflation and migrants has strained society. Real estate prices have increased significantly. The housing market is now in a state of pent-up demand. There will not be as many new construction projects next year as in 2021-2023. But you shouldn't expect prices to fall. The cost of construction and land plots has also increased significantly.
Apartments and villas in Türkiye with a high cadastral value for a residence permit and citizenship will be in demand and there will not be many such lots. All the best options for real estate for a passport or residence permit in Türkiye are in our portfolio. Please contact us for a consultation.