500.000-USD Bank Deposit or 250.000-USD Property Purhcase for Turkish Citizenship

As it is well known, after the new law enacted on 18.09.2018 the conditions of Turkish Citizenship by investment lowered. Under the new law there are 5 methods to obtain Turkish Citizenship by investment.

  1. Fixed capital investment of USD 500,000 or equivalent foreign currency or Turkish lira, as attested by the Ministry of Industry and Technology
  2. Purchasing a property worth a minimum of USD 250,000
  3. Creating jobs for at least 50 people in Turkey
  4. Depositing at least USD 500,000 or equivalent foreign currency or Turkish lira in banks operating in Turkey
  5. Buying at least USD 500,000 or equivalent foreign currency or Turkish lira worth of government bonds
  6. Buying at least USD 500,000 or equivalent foreign currency or Turkish lira worth of real estate investment fund

Among the above options, number 2 purchasing a property with the value of 250.000-USD and number 4 depositing 500.000-USD or equivalent foreign currency or Turkish lira in banks are by far more popular compared to other options.

The main reason behind this choice for the Turkish Citizenship applications for investments is probably the forecast of the investors for their ROI (return of investment).

The other important motivation for purchasing 250.000-USD for Turkish Citizenship is relocating Turkey and living in the purchased house.

Additionally, the real estate project developers and real estate agents in Turkey advertise this option much more compared to the other options of the Turkish Citizenship by investment.

One of the most frequently asked questions of the potential Turkish Citizenship by investment clients are “what the rental income will be if I purchase a property with the 250.000USD for Turkish Citizenship”. It is not easy to answer this question,  since there are lots of parameters affecting the rental value of the property.

In order to discover that your real estate investment in Turkey for citizenship profitable or not, as other countries the main tool you can use is “rental multiplier”.

If you divide the money you pay to buy the property into the gross monthly rental income of the property, the number you get is the monthly rental multiplier for that property.

For example, if you rent a real estate that you have bought for 300.00-USD to 1,000-USD, the rental multiplier for this case will be 300.

Today, the monthly rental multiplier in Istanbul varies between 200 and 300. In luxury residences the multiplier exceeds 300. Therefore, the investor wishes to purchase a property in Turkey for citizenship may reference this rental multiplier.

On the other hand, for the other popular method which is 500.000-USD or equivalent bank deposit for Turkish citizenship the factor for ROI is the interest rate. The interest rate for TL is quite high in Turkey currently it is approximately 14-15%, however for the USD and EUR it is approx. %2-3. Also the advantage for bank deposit for Turkish citizenship is, you do not have to find a tenant for your revenue and you do not need to find a buyer after third year.

Consequently, both options have advantages and we will be happy to assist our valuable clients for their decision process.

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