Investing in Turkish Real Estate: How to Obtain Citizenship and Tax Benefits Simultaneously?

Turkey remains a popular destination for investors seeking to purchase real estate, generate rental income, and obtain citizenship simultaneously. Turkish law allows for citizenship acquisition through real estate investments of at least USD 400,000, provided the property is not sold for a minimum of three years. However, the purchase itself does not automatically grant tax exemptions. It is crucial for the investor to structure the transaction in advance to meet citizenship program requirements while effectively utilizing tax benefits provided under Turkish law.

The primary requirement for obtaining Turkish citizenship through real estate is the purchase of one or more properties with a total value of at least USD 400,000. The documentation must state that the property is being purchased for the purpose of participating in the citizenship program and that a three-year restriction on sale applies to the asset.

Investors may purchase residential or commercial property; once the title deed is registered, they receive the document necessary to proceed with the citizenship application. It is important to note that the purchase must satisfy not only the minimum investment value but also the formal requirements of Turkish land and immigration laws. Therefore, prior to finalizing the transaction, it is essential to verify the seller's title and check for any encumbrances, mortgages, or other restrictions on the property.

Is it possible to generate income from the property during the three-year period? Yes. The restriction on selling the property for three years does not prevent the owner from using the asset. Depending on the property type and the specific investment model, it can be used for personal residence or rented out.

Rental income is subject to taxation in accordance with Turkish regulations. Rules regarding the declaration of rental income apply to individuals, and a specific annual tax-exempt threshold exists for residential property. For 2026, the threshold for this specific type of residential rental income is 58,000 Turkish Lira.

For non-residents, it is crucial to clearly establish their tax status. Turkey taxes non-residents on income generated within the country; therefore, obtaining citizenship does not automatically equate to acquiring tax residency.

The primary advantage lies not in a special "tax-free status for citizens," but in the ability to correctly apply general tax rules to a specific investment.

1. Exemption for residential rental income

Individuals in Turkey benefit from an annual exemption on a certain amount of residential rental income. In 2026, this amount is 58,000 TRY. Provided statutory conditions are met, this portion of income is excluded from the taxable base.

However, this exemption is subject to conditions and may not apply to all taxpayers; factors such as the individual's other income and tax status play a role.

2. Deduction of documented expenses

Legislation allows for the deduction of certain expenses when taxing rental income. Under the actual expense method, costs that comply with established regulations may be deducted from the income.

Consequently, it is important for investors to retain documentation regarding property maintenance and operating costs. Proper record-keeping can directly impact the tax amount.

3. Moderate annual property tax burden

Turkey imposes an annual property tax. Generally, rates for buildings, apartments, and land plots depend on the property type and location; Turkey's official investment portal indicates a base range of 0.1% to 0.6%. This means that when calculating investment returns, one must consider not only potential rental income but also annual taxes and property maintenance costs. In addition to the property price itself, the investor must account for taxes and fees associated with closing the transaction. Depending on the deal structure, VAT and other charges may apply; therefore, the tax burden should be calculated prior to signing the contract.

In Turkey, the general VAT rate can be 1%, 10%, or 20%, depending on the category of goods or services; however, the specific tax treatment of a real estate transaction depends on the property's characteristics and the terms of sale. Consequently, an investment of $400,000 does not necessarily mean the total transaction budget will be $400,000. The financial model must incorporate taxes, registration fees, legal costs, commissions, and potential property management expenses.

The optimal structure depends on the investor's objective. If the primary goal is to obtain citizenship while simultaneously generating a source of passive income, properties can be selected based not only on price but also on their potential rental yield. 

When investing, the choice between owning real estate personally or using a legal structure may also be important. This choice affects income taxation, expenses, asset management, subsequent sale, and inheritance.

Before purchasing real estate in Turkey, an investor should check:

• the property's compliance with the citizenship program;
• the market and documented value of the property;
• the presence of mortgages, liens, and other encumbrances;
• taxes and expenses associated with the acquisition;
• potential rental income and its taxation;
• the investor's tax status;
• potential tax consequences in the country of their tax residency.

Investing in Turkish real estate can simultaneously achieve several goals: acquiring an asset, generating rental income, and obtaining citizenship through the investment program. The minimum investment for the real estate route is USD 400,000, and the property must be held for at least three years.

However, tax advantages do not automatically accrue with Turkish citizenship. These require separate planning: determining the investor's tax status, properly formalizing the acquisition, choosing the optimal property use model, and considering the taxation of rental income and sales. Antwort Law helps investors comprehensively structure their investments in Turkey – from property due diligence and transaction support to analyzing citizenship, tax implications, and choosing the optimal asset ownership structure.

Lidia Ivanova

International lawyer
Antwort Law