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Payments in Turkish Citizenship-For-Home Scheme to Be Sold to Cenbank

Foreigners' hard currency investments in a citizenship-for-homes programme will, as of Friday, be sold to the central bank under the latest measure to replenish depleted official reserves in the wake of a lira crisis.

Payments in Turkish Citizenship-For-Home Scheme to Be Sold to Cenbank

Foreigners paying the minimum $250,000 in the scheme must not sell the property for three years to get a Turkish passport. Alternatively, they can make a minimum fixed capital investment of at least $500,000.

Under the new regulation, the foreign currency investment sum will be sold to the central bank through another Turkish bank before the transaction goes through.

Ankara adopted the scheme in 2017 with an initial minimum price of $1 million on homes. It was cut to $250,000 a year later to attract foreign buyers and help alleviate a currency crisis.

The latest regulatory change came after an even sharper collapse in the lira last month and was announced in the country's Official Gazette on Jan. 6. It takes effect Friday.

The lira tumbled 44% in value against the dollar last year, setting off an inflationary spiral in recent months and a series of state measures in recent weeks to arrest the market turmoil.

The central bank announced sales of $7.28 billion in December to support the lira, cutting its net international reserves to $7.55 billion by Jan. 14, their lowest level since 2002, the bank's data showed on Thursday.

Last October, property experts said record sales of homes to foreigners - driven by lira weakness and the citizenship offer - were starting to slow after a new government rule aimed at tackling inflated prices.

The experts said some sellers worked with selected appraisal companies to inflate prices. In response, a regulation was passed requiring the land-registry authority to assign appraisers themselves to prevent system abuse.

However, with the further lira slide in late 2021, more properties were sold to non-citizens. Official data showed that House sales to foreigners surged 77% annually in December to 7,841 properties.

Source: Reuters

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