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Investing • Real Estate

The Turkey Real Estate Guide

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**Urgent** Update December 2024

Turkey rumoured to raise its minimum CBI (Citizenship by Investment) level from $400,000 to $600,000, effective start of 2024.


Dateline: Kuala Lumpur, Malaysia

A decade ago, I visited Istanbul in Turkey. I said it was ‘enigmatic.’ It was really hard to gauge how the country might be useful for a Nomad Capitalist, both in terms of offering the right investments and at the right price.

Fast forward to 2020 and it’s clear to me now that it is a city of endless opportunity.

Not only is Turkey one of the hottest things in the “Second Citizenship industry” right now. It’s also a highly attractive place for real estate investment

I define a great deal as any property that’s in a great location in a major city and costs less than $1,000 per square meter to buy. 

Istanbul, for example, is full of great deals right now. From penthouses in some of the most coveted neighborhoods to new land developments in the suburbs, Istanbul offers a great ROI for those willing to do the legwork. 

So, how do you invest in real estate in Turkey, how do you maintain your property and what taxes are applicable when you decide to sell it?  

Let’s find out. 

Why Turkey Real Estate?

Turkey was founded on the remnants of the Ottoman Empire back in 1932. Immediately, it shunned religious rules and replaced them with secular laws, which is a major part of why it has become an important player on the global stage. 

Economic growth and personal prosperity are at the heart of Turkey. And the fact that it has forever been ‘stuck between the West and the East’ means that it’s taken the best practices of both worlds. 

Their ‘Asian’ ability to grow their GDP, coupled with the yearning for a ‘Western’ quality of life makes Turkey a great proposition. 

It’s not just these qualities or its favorable geographic location, however.

They’ve got a young and dynamic population where the median age is 31.5  Talk about potential. 

Specifically, in this article, we will focus on Istanbul. It’s not only the largest Turkish city but also the most important one geopolitically. 

Other opportunities exist. You’ll just have to do your own research.

Get a Turkish Passport While You’re At It 

Citizenship by Investment with Turkey Real Estate

Buying real estate in Turkey has a huge perk – you can get a passport if you invest a large enough sum. 

When it launched its citizenship by investment program, Turkey had set the price at $1 million and had almost no takers. 

The price of the program went down to $250,000 in 2018, but its sheer popularity led to public pressure in Turkey, resulting in the minimum investment requirement being raised in 2022 from $250,000 to $400,000.

Citizenship by investment in Turkey is one of the hottest things in the Nomad Capitalist world right now, and people are buying these up. 

It’s a very attractive option for those who want to invest and get a second passport. A Turkish passport can be a great addition to your passport portfolio because it’s an E-2 visa country with the United States. 

So, if you need a quick solution for accessing the US, a Turkish passport might be just the thing. And Chinese investors have certainly jumped on this bandwagon. 

Recently, Turkey disclosed that they’re probably going to raise the price of the program. But they’d only be doing that if they felt they could comfortably get that. 

It’s a big enough market to absorb more demand, so we only see it growing in the future.

The Best Neighborhoods in Istanbul 

With a population of 15.5 million, Istanbul is an incredibly diverse city. There are many neighborhoods – some more desirable than others. 

Here is where you should be looking to buy:

Nisantasi. One of the most expensive areas, this is where the fancy restaurants and the shops are. Finding cheap deals here is impossible, but if you purchase something in Nisantasi, the chances of its value going up in the future are really high. You can find good $250K options that will be suitable for the citizenship by investment program, but it would be a relatively small place. 

Taksim. A central area within the historical center, Taksim has the oldest mosques and palaces in all of Istanbul. You can definitely find something under $1,000 per square meter in Taksim, but you should be careful. The quality of the buildings will differ from street to street. Most ground floors, mezzanine, first, and second floors are the cheaper options.

Karakoy. It’s an area of mostly older buildings in what I like to call the hipster side of Istanbul. There are loads of cafes and restaurants on the streets, plenty of people out and about. You can really feel the big city vibes here. Deals for around $1,500 per square meter can be found in Karakoy by those who look well enough. 

Cihangir. Just minutes away from Karakoy is another trendy part of town. Cihangir has long been a favorite with the musicians and the artists of the city. Now, many startups have made Cihangir their home too. Well-educated Turkish families and expats intermingle here, which makes it a perfect place to buy an apartment for an investment. 

Check out a property tour we did in Cihangir recently: 

My Tour of an Istanbul Apartment for Sale + Turkish Real Estate Market

Why Now? 

Many people will not be comfortable with the idea of investing in Turkey. 

But I’m a contrarian – I go where the great deals and opportunities are, not necessarily where people feel comfortable. So, for me, that’s the short answer to the question ‘why now?’

There are multiple factors that contribute to the situation in Turkey today, where real estate deals are easy to come by. 

But one of the biggest reasons is the downfall of the Turkish Lira (TL) that took place in 2018. I still remember sitting at a hotel restaurant in Kuala Lumpur with a friend and watching the collapse of the Lira unfold over the course of one night, pretty much. 

Right now, one Turkish Lira is merely $0.15 cents to the dollar, so you could say that Turkey’s real estate is on sale. 

And that’s a great opportunity for investors. 

How to Invest in Turkey Real Estate

If you’re a seasoned investor, navigating a new locale will come naturally. You’ll go in, find yourself a few reliable locals to help you, and get the job done. 

But if you are just starting to invest in real estate or diversify your investment portfolio (geographically or in terms of asset classes), then you might need a little bit more hand-holding. 

In both cases, this section of our Turkey Real Estate Guide will tell you how exactly to invest, in practical terms. 

Locating a Great Real Estate Deal

Buying property in Turkey consists of multiple steps. You’ll need to find a real estate agent, then find and view a property that you’d like to buy. 

You’ll also need to be aware of all the fees and legal processes that are involved before you legally become the owner of a Turkish apartment and can start benefiting from a 6-7% annual average ROI.  

Real Estate Agents and their Commission Fees

First things first, you’ll need to find yourself a real estate agent, unless you’re set on scouring the Turkish property ads yourself. 

You need to find someone reliable and it’d be great if it was a person that was recommended to you. As always, Nomad Capitalist can help here

The legal maximum limit for the real estate agent commission is 4% of the property value, which is fairly average when you compare it to other countries in the world. 

The law states that the rate should be divided equally between the buyer and the seller, but of course, there are nuances. 

In some cases, the seller may stipulate that the burden of the payment of the agent commission fees is totally on the buyer. This is especially done when the seller is in no rush to sell and can patiently sit and wait for a buyer to come along that will agree with these terms. 

The Title Deed 

When it comes to the title deed – the legal document that actually passes the property ownership from someone else to you – the fee is also 4% (2020). 

And just the same, the rate should be divided equally between the buyer and the seller. The law dictates that. 

Yet, in some cases, the seller leaves the payment burden on the buyer in full. 

The title deed fee on real estate in Turkey is paid after scheduling an appointment at the land registry before the title deed transfer commences. 

So, if the seller you’re dealing with requires you to pay the real estate agent commission and the title deed fees in full (which they legally can), you’re looking at an 8% up-front payment, before the changing of hands of the property even begins.

That’s definitely something to keep in mind. For a $200,000 property, you’re looking at $16,000 in fees, for example.

What’s What: Turkey Real Estate VAT

Turkey Real Estate VAT

The most complex fee in the whole real estate investment in Turkey is the VAT. With so many rates, rules and exceptions, it’s easy to get lost. 

Let’s break it down.

You do NOT have to pay VAT when:

  • You are the first owner of a house or an apartment in a new project, or
  • You are buying from an individual whose livelihood isn’t selling properties.

Note that buying land is an entirely different ballgame and it should be done with even more caution. Different rules on VAT and other fees apply. 

And you definitely have to pay VAT when: 

  • You’re a foreign buyer and you’re purchasing from a Turkish company that sells pre-owned properties as their main field of business.

So, there are a few good ways to avoid having to pay VAT if you’re smart with your property search. 

If you want to go the traditional route and buy a pre-owned apartment in the older part of Istanbul, for example, look for sellers who are regular people (not companies or agencies) to avoid VAT. 

How VAT Is Calculated 

Have you determined that you are liable to pay VAT?  It’s not necessarily bad news. 

It’s based on multiple factors and is calculated in rather complex ways. The two main things you must take into consideration is the date of the building license and the surface area of the property. 

If the building license has been obtained before 01.01.2013 and the surface area is 150m2 or below, then the VAT rate charged is 1%

However, if the surface area exceeds 150m2, then the VAT jumps to 18%. You better avoid anything this large. 

Then come buildings with a license that was obtained between 01.01.2013 and 12.31.2016. 

If the per-square-meter value is between 500TL and 1,000TL, then the VAT charged is 8%. Going for a higher value property? Anything over 1,000TL gets an 18% VAT charge.

And for the newest properties, if a building license was obtained on or after 01.01.2017 and if the per-square-meter value is between 1,000TL and 2,000TL, then the VAT rate is 8%

If the value is above 2,000TL, you will get charged 18%

You get the pattern. Lower priced and older properties carry lower VAT charges than newer and more expensive properties. 

It’s obvious that the laws have changed quite a bit in the last decade, hence the different rates.

So, as always, you should keep in mind that the above-mentioned rates can change at any time. The Turkish government isn’t exactly known for extreme stability. 

I’d suggest you contact a certified public accountant to calculate the most recent VAT rates for specific properties. 

The Cheapest City for Real Estate in Europe 2020

A Note on Surface Area of Properties in Turkey 

One of the things that the VAT rate depends on is the surface area of the apartment that you’re looking to buy. 

However, the number that you can find on ads doesn’t usually match the actual living space of the apartment. Sometimes, by quite a lot. 

For example, say you find a place advertised that is 80 square meters. You’re interested, so you go to view the apartment. Strangely enough, it feels much smaller than 80m2.

That’s because it is. The 80m2 includes part of the communal garden and part of the stairwell too, which are technically ‘yours’ but aren’t livable space. 

This is one of the peculiarities of Turkish real estate, so make sure you never buy a place without visiting it first.

Other Turkey Real Estate Purchase Fees 

There are four more fees in addition to the fees mentioned above that don’t amount to much but that you should still keep in mind. 

We like to do things properly here at Nomad Capitalist. 

Revolving Capital Service Fee. This fee depends on the area of the city/country where you’re buying property. For example, if you buy in most of Istanbul, you’d pay around $60. We won’t bore you with the math.

Land Registry Service Fee for Foreigners. This is a fee of approximately $110 (2020) that changes annually.

Appraisal Report Fee. It is mandatory to issue an appraisal report for the property that you wish to buy. These reports can only be issued by companies that are registered on the Turkish Capital Market Board’s list. The fee ranges from $230 to $460, approximately. 

Expert Translator Fee (Optional). Expert translators are different from sworn translators at a notary. Only a few expert translators exist in the market, which makes them expensive. However, they are only needed if the foreign buyer wishes to attend the Land Registry himself and not via an attorney who has Power of Attorney.

Maintaining a Property in Turkey: Logistics and Taxes

Maintaining a property in Turkey logistics and taxes

As with every investment property, you should have a solid plan as to how you’re going to maintain it. Usually, hiring a local property manager can save you a lot of headaches and is certainly worth your while. 

But having a property manager doesn’t mean you shouldn’t do your homework. You also need to know just how much money it will take to run your investment property on an annual basis so that you know what to expect in terms of the property’s ROI

Insurance, Fees, and Bills

Mandatory earthquake insurance. Turkey sits in a zone of relatively high seismic activity, so every property owner must pay a mandatory earthquake insurance premium. This annual payment is approximately $30. 

Not having earthquake insurance will mean your property purchase will be delayed by the land registry.

Environment Tax. This tax depends on the usage of water in the property. In Istanbul, it’s 0.47TL per cubic meter. This tax is charged with every water bill, so your tenants should cover it.

Maintenance Fees. This is a fee that depends on the type and location of the property. Normally, the tenants will pay the maintenance fees in Turkey, so if you’ve purchased a property for investment, it’d be wise to find a tenant too. 

Bills. All of the bills, including electricity, water, gas and waste management, are traditionally paid by the tenants, as everywhere in the world. If the property is vacant and no one is using the utilities, a small part of the bills will still have to be paid for service maintenance. 

Property Tax

Property tax is just one of the “taxes on wealth” that are applied in Turkey. It must be paid every year in two equal installments. 

The annual tax rate is 0.2% for apartments and houses within the borders of a metropolitan municipality, for example, Istanbul. 

So, the owner of an apartment in central Istanbul that’s worth 1,500,000TL will pay 3,000TL per year in total. The first installment must be paid in May and the second one in November. 

If you’re selling a property, you’re obligated to pay the accumulated property tax burden from all of the previous years before a title deed transfer can commence. 

In other words, no buyer will want a property with outstanding property tax debt.

The Challenges of Buying Turkish Real Estate 

The Challenges of Buying Turkish Real Estate

Everything comes with its challenges. The main one for buying real estate in Turkey is that there are so many developers that are good in sales and so many websites that do a great marketing job. 

Meanwhile, the inventory is not so great. In fact, it is often just bad. 

The sweet-talking developers and the great looking websites sell to foreigners from the UK, the US, Germany and plenty of others. They get you in on a ‘great deal,’ which isn’t a great deal at all. 

You need to get on the ground and check out the actual inventory of properties. Only then can you be sure you’re getting amazing prices. 

And if you do, do so quickly. As Turkey comes onto more and more people’s radar, the prices will continue to rise. 

In other words, there won’t be many deals going for under $1,000 per square meter for long. 

Selling Your Turkish Real Estate

Based on our research here at Nomad Capitalist, now is a great time to invest in real estate in Turkey. However, there will come a time when you’ll want to sell your property.

One thing you should keep in mind about selling in Turkey is that the market isn’t as liquid as elsewhere. Hence why you should be planning out your moves not months, but years in advance. 

And, naturally, there are various fees to consider when you do sell your property in Turkey. 

Remember the real estate agent commission we talked about before? It’s 4%, split between the buyer and the seller. 

Plus, if you sell your property within 5 years of purchasing it, you are liable to pay the Unearned Increment Tax. 

How Unearned Increment Tax Is Calculated

Unearned Increment tax is just like Capital Gains tax, and it’s payable if the increase in the property’s worth exceeds the Turkish Domestic Producer Price Index (DPPI).

Let’s do a sample calculation. 

Let’s say the property was purchased on 01.01.2015 for 200,000TL and four years later, on 01.01.2019 you wanted to sell it for 400,000TL. 

You’d look at the DPPI of 01.12.2014 which was 235,84TL (you must look at the index of the previous month) and the DPPI of 12.01.2018, which was 422,94TL

A bit of math follows:

200,000TL x (422,94 / 235,84) = 358.666TL – this is your threshold in terms of natural increment. 

Then, you’d subtract that sum from your asking price of 400,000TL to get 41,334TL. This is the basis of the assessment of the Unearned Increment tax. 

Every year, they come up with an Exceptional Discount in Turkey. In 2019, this discount was 14,800TL. 

So, 41,334TL – 13,800TL = 26,534TL. 

You can also subtract the Title Deed Fee from the final taxable sum. It was 1.5% in 2019, calculated from the total asking price (so 1.5% of 400,000TL). 

26,534TL – 6,000 TL = 20,534TL. This is the final sum that is subject to taxation. 

A rate of 15% applies up to 18,000TL and a rate of 20% applies between 18,001TL and 40,000TL.

All of this makes the bill a grand total of… 3,080.1TL, which means you’d be paying $470 in tax. It’s a tiny amount, really. 

Turkey. Why Not? 

Turkey. Why Not?

The Nomad Capitalist team is always on the lookout for new markets. When we look, we’re searching for the next proverbial Singapore. 

We want great deals and an easy way to get business done. One of such places in Europe right now is Istanbul. 

What we love about Turkey, despite some of the challenges, is that it’s a huge domestic market, it has a good reproduction rate, and a young population. 

It’s currency, the Turkish Lira, has also suffered greatly over the past few years. The result – a lot of investment has left the country, which makes it the perfect place for us to swoop in and purchase real estate. 

Not everyone will be sold on Turkey, but if you think you can find a great deal and perhaps get a second passport in the process, why not go for it? 

The prices will continue to rise, and capital and people will continue to arrive in Istanbul.

Are you ready to make the move? We can help you set up your life so that you Go Where You’re Treated Best™.


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