Why are the Iraqis ranked first among the most foreign real estate Buyers in Turkey?

Why are the Iraqis ranked first among the most foreign real estate Buyers in Turkey?

- in Releases
176
Comments Off on Why are the Iraqis ranked first among the most foreign real estate Buyers in Turkey?

Researcher Shatha Khalil *
since 2003 and till today, Iraq has witnessed many political and sectarian situations, economic instability and its impact on social life, with violence continuing in many central and southern Iraq.

Thousands of citizens have been forced to leave their homes daily, and they are looking for alternatives and options in safe countries to settle in and start a new life.
Due to Turkey’s location next to the Iraqi border and its easy access by road, it has made it a destination for many Iraqis, either for permanent residence or for the benefit of transit to European countries, as it is the gateway to many of them , as well as the existence of many trade relations between the two countries, which were based on the export of Turkish products to Iraq and the import of Iraqi oil to Turkey, which placed it in the forefront of the options and the easiest for many Iraqis.
Migration of Iraqis to Turkey:
Turkish official reports indicate that the migration of Iraqis to the country has seen a remarkable increase, especially after the control of the terrorist organization ISIS on the city of Mosul in northern Iraq in June 2014.
And in its turn led to the increase of Iraqis coming to different parts of Turkey , the United Nations High Commissioner for Refugees (UNHCR) announced in 2016 that the number of Iraqis registered in Turkey reached (126750), including (27,600) registered as refugees, (99140) have the status of asylum seekers.
The number of Iraqis residing in Turkey has increased significantly. The number of schools approved by the Iraqi Ministry of Education is 27, distributed over the Turkish provinces with more than 700,000 Iraqis. Istanbul has five schools, the largest number in one governorate, equal with the number in the capital Ankara.
Real Estate Accommodation:
Real estate is one of the most important attractions for Iraqis and their desire to buy real estate in Turkey. Turkey has granted foreign citizens the right to live in Turkey by purchasing a property at least one. They are entitled to extend it until it becomes a permanent residence. This is convenient for Iraqis to look for Long-term stays away from short-term tourist residences, which contribute to enhance an almost permanent Iraqi presence in Turkey.

Mortgage and purchase by installments
The Turkish law allows a foreign investor to obtain a mortgage to own a house in Turkey. This law increases the number of buyers and facilitates the purchase process, especially if they have enough money to buy a property in Turkey. After issuing the mortgage law for foreigners in Turkey, Iraqis can borrow loans from Turkish banks to purchase the property or buy the property directly from the construction company by installment. There are many advantages when buying houses in Turkey, especially buying apartments in Istanbul in modern complexes where the Construction companies allow the sale of real estate under construction in installments for foreigners, and perhaps the latest statistics show the escalation rates of Iraqis who have real estates in Turkey, which means they benefit greatly from the ways of sale by mortgage or installment in Turkey.

VAT Cancellation: The Turkish laws allow foreign and expatriate Turkish property buyers to pay the price of the property from outside Turkey via Turkish banks, thus benefiting from the cancellation of VAT (1-18%). This allows Iraqis living in their country or in Europe to buy the property before reaching Turkey, taking advantage of the tax cuts on the price of the property.

The sale of real estate in Turkey only by “Turkish Lira ” : p Real estates prices in Turkey were priced in one of two ways: either in the local currency “Turkish lira” or in foreign currencies such as the US dollar, the euro and the sterling yen in some tourist properties, but after about eight months of the crisis in which the prices of the exchange of Turkish Lira have passed , Turkish Presidency issued a decree in September 2018 prohibiting the pricing of real estate other than the Turkish lira, thus the foreign buyer is forced to exchange the foreign currency into the Turkish lira and then buy the property.
This encouraged the Iraqi investors where many of the luxury properties in Turkey, which were in dollars or euro which did not fall in price , However, after re-pricing in Turkish lira, this guarantees the investor a 40% lower price which contributed to the increase in demand for real estate and ( real estate investment ).
Real estate law and nationality?
In 2012, the Turkish Republic issued a law authorizing foreigners to own property in Turkey. The Iraqis were among the nationalities allowed to buy property in any of the Turkish cities without exception, after obtaining the approval of the Ministries of Interior and Foreign Affairs and buying any type of real estate, (Apartments) (villas) or (shops).
Bringing the attention of thousands of wealthy Iraqis looking for a suitable investment environment to study ( the Turkish real estate market ) , buy real estate in Turkey, and transfer property directly to their name with the righ to dispose of the property (sale, purchase, lease, inheritance) without any impediment, and therefore the property remains a lifelong property as soon as there is ( a title deed ) which is an official document issued by the Turkish government confirming the ownership of the property.
After purchasing a property in Turkey, the Iraqi citizen has the right to obtain a residence based on this property, which allows him to travel within and outside the Turkish border, and to carry out all business and legal affairs after submitting all the necessary papers for obtaining residence in Turkey.
Under the law on the granting of Turkish citizenship to foreigners, issued on 19-9-2018, the Iraqi who owns a property of $ 250 thousand (Turkish citizenship) was also allowed to get the Turkish nationality, as well as all other rights to register children in Turkish schools and universities- international and Arab ones in the (Turkish cities), the use of (Turkish banks) and the completion of all the necessary papers and transactions within the Turkish government departments.
The papers required to complete the process of (taboo) for Iraqis after (buying the property in Turkey)
1. Copy of the passport translated into Turkish and certified by the Turkish Notary and the Turkish Embassy abroad.
2. The presence of (tax number) extracted from the state.
3. Personal photos.
4. Receipts for payment of all fees related to the real estate registration transactions (Taboo).
5. The presence of the owner of the property or any person entrusted to him by an authenticated agency from the Turkish Embassy or from the Turkish Notary.
In the latest study (for the growth of real estate investments) and statistics on (the nationalities who are the most owners of real estate in Turkey), Iraqis ranked first in 2018 as the highest percentage of foreigners who bought a property in Turkey. The number of properties sold to Iraqis in previous years amounted by (20000) apartment in all Turkish cities, foremost Istanbul – Yelwa – Bursa.
And here we come to an important result should be highlighted… Why the investment of Iraqis in Turkey, not Iraq?
Iraq, with its giant oil capacity as the second country in the Organization of Petroleum Exporting Countries (OPEC) with a rate of (3.8) million barrels per day, a candidate for the increase to more than (6) million barrels per day during a short period, and a massive oil reserves estimated at (152) billion barrels , placing it within the largest oil reserves globally but it may find no way to bring international companies to invest in a country where everything needs either construction or reconstruction.
The lack of of these companies on the one hand and the lack of local investment on the other, the reason is not the nature of the investment itself as much as it is related to the investment environment of the expulsion of capital, despite the desire of the Iraqi government to promote the construction and create an atmosphere attractive to global companies, and in the light of the global recession and the decline in levels of global spending, the Iraqi environment has remained as an expulsion and unattractive for the investment , and perhaps the reasons are summarized by the nature of the Iraqi environment, which can be summarized as follows:
• Political and security instability. Despite the successive victories of the Iraqi security forces, the situation remains unstable and presents an obstacle to foreign and domestic capital.
• Corruption of all kinds, and in all joints of the financial and administrative state, is one of the most important reasons for the obstruction of foreign investment and the expulsion of the local, because it creates an atmosphere of mistrust towards the political system and the efficiency of its regulatory and judicial systems.
• The weakness of supporting legal legislation and incentives for investment and the bureaucracy of transactions that hinder the investment process.
• The destruction of infrastructure such as roads, bridges, airports, transportation and electrical system damaged by successive wars, affecting negatively the rest of the medium and small enterprises, which represent the largest sector for the employment of labor and reduce the levels of unemployment.
• There is no integrated financial and banking system that ensures easy flow of funds and smooth financial and commercial transactions, which is an obstacle to foreign investment.
• The random and not well studied policy of import and export, and adopt the policy of the open door to foreign goods, good and bad alike and the consequent weakening of the national industry and thus weaken the private sector in a way that makes it unable to play its developmental role.
• Lack of active involvement of the private sector, its inability to carry out its responsibilities, the acceleration of the construction process and the employment of manpower, and thus creating a sound economic and development environment.

Translated by : mudhaffar al-kusairi
Economic Studies Unit
Rawabet Center for Research and Strategic Studies