A high level team visit Spain to find out the secrets of a successful foreign property investment policy.
The Turkish Government has been keen to balance the views and actions of nationalists who instigated the temporary ban on sales of land and property to foreigners with the huge inward investment potential that these sales bring. In a positive move the Finance Minister and Culture and Tourism Minister visited Spain at the end of July to investigate the Spanish Model for the sale of properties to foreigners that has attracted over £120 billion in sales of land and property over the last 30 years.
So what is the Spanish model? Well, put simply it relies on off plan purchases. Buyers pay stage deposits to fund the building work and that helps developers reduce their borrowing costs. It also enables developers to carry out their legal requirement for the provision of infrastructure development such as roads, parks and bridges which is something missing from the Turkish system at present.
Only time will tell which model Turkey will go for but we would suggest they should also look at countries like Panama as a model. They offer foreign property purchasers real financial benefits for buying in their country. These include free residence, reduced property taxes, no capital gains tax on sales, discounted electricity and water bills. If Turkey could attract significant inward property investment it could really help it to sort its creaking current account deficit.