Turkey Bans Property Purchases by Foreign Companies

Changes are afoot in Turkey, after the Constitutional Court of Turkey ruled last week that foreign companies are now banned from buying property.

The Constitutional Court has effectively annulled part of a law that allowed the sale of property to foreign companies. The decision is alleged to have arisen after complaints were received from the Republican People’s Party about the law. It doesn’t affect individual foreign property buyers, but does affect companies which are established by foreign investors or joint ventures involving foreign firms buying [tag]property in Turkey[/tag].

There has already been opposition from some areas within the Turkish Government about this move. Turkey’s finance minister, for example, has been reported as admitting that it certainly won’t help the Turkish efforts to attract foreign investors into the country.

This does sound like a worrying development, but does it have any impact on property purchases by individuals? “There is no need to panic,” reassures John Howell, a partner at the International Law Partnership LLP. “For the average UK buyer, Turkey is still a safe place to purchase property. The majority of private buyers will not be affected by the annulment of the law allowing the sale of property to foreign companies.”

John is optimistic that Turkey will survive the changes and continue to be a country where tourists want to visit and buy holiday homes. “Once the current excess of supply has been absorbed, this should lead to steadily rising prices. Not at 20% to 30% per year, but at a more normal 5% to 10% a year,” he says. “At the same time, as more and more tourists visit Turkey, there should be a stronger rental market.”

[tags]Turkey Property, Real Estate Turkey, off-plan investment, investment property[/tags]