Turkey’s Real Estate Market in 2024–2025: Risks and Restrictions for Foreign Investors

Turkey’s real estate market is undergoing a large-scale restructuring. New short-term rental rules, additional taxes, and declining foreign interest are reshaping traditional investment strategies. Where Airbnb income and quick resale to overseas buyers once dominated, these models are now losing efficiency. This article summarizes key regulatory changes and practical implications for investors—from legal requirements to macroeconomic risks.

Short-Term Rentals: Regulatory Shock

Permit and Plaque (İzin Belgesi). Rentals under 100 days are now only legal with official authorization from the Ministry of Culture and Tourism and the display of a plaque at the property entrance. Lack of documentation leads to orders to legalize activity and heavy fines.

These rules were first codified in Law No. 7464 (Nov 2, 2023) and detailed in a regulation effective Jan 1, 2024. Applications are filed via the e-Devlet
system, and plaques must be installed within 30 days. Each plaque contains a unique permit number and QR code linking to property details.

Penalties are strict: TRY 100,000 (~$2,500) for the first violation, rising to TRY 500,000–1,000,000 for repeat offenses. Online platforms also face fines of TRY 100,000 per illegal listing.

Concentration limit. In multi-unit buildings, one owner may license only up to 25% of apartments to prevent “mini-hotels.”

Taxes and Mandatory Fees

Transfer duty (tapu harcı). A 4% title deed transfer tax applies to all sales, officially split between buyer and seller but usually borne by the buyer. For a property worth TRY 1 million, the fee equals TRY 40,000.

Annual property tax (Emlak Vergisi). Residential properties are taxed at 0.1–0.2% of cadastral value depending on location, commercial at 0.2–0.4%. In Istanbul, a TRY 2 million apartment results in a yearly tax of TRY 4,000.

Accommodation Tax. Since 2023, short-term rentals incur an additional 2% accommodation tax, on top of VAT.

Rental income tax (PIT). Both residents and non-residents pay progressive income tax on rental earnings (15%–40%). The 2024 exemption threshold was TRY 33,000.

Macroeconomic Pressures

Inflation remains a key risk. TÜİK reported annual CPI growth of 32.95% in August 2025, with housing costs rising over 53% year-on-year.

Housing prices rose 32.8% nominally in July 2025, but inflation-adjusted figures show a 0.5% decline—the first negative real growth in years.

Declining Foreign Demand

Foreign purchases fell 32.1% in 2024 and continued dropping in 2025. In July 2025, foreigners bought just 1,913 homes, only 1.3% of total sales. Russians led with 315 deals, followed by Iranians (152) and Germans (135).

This structural decline highlights that “buy and flip to a foreigner” is no longer viable. Holding periods are longer, liquidity is weaker, and external demand no longer drives growth.

Business Models Under Pressure

Model A: Short-term rentals (Airbnb). Heavily regulated, requiring unanimous neighbor consent, İzin Belgesi, and subject to large fines plus multiple taxes.

Model B: Long-term rentals. More stable legally, but yields are modest after taxes and expenses.

Model C: Buy-to-hold. With inflation-adjusted price stagnation, speculative gains are limited.

Investor Checklist

Rental strategy: Ensure readiness to obtain permits and secure unanimous neighbor approval.

Taxes and fees: Budget for 4% tapu harcı, annual property tax, 2% accommodation tax, and PIT on rental income.

Price growth: Consider real vs. nominal appreciation amid >30% inflation.

Exit/liquidity: Don’t rely on foreign demand for quick resales.

Conclusion

Turkey remains a major and diverse market, but old investment models are no longer straightforward. Investors must factor in:

Strict legal compliance (permits, plaques, neighbor approval, 25% cap).

High tax burdens (accommodation tax, PIT, property tax, transfer duty).

Macroeconomic headwinds (high inflation, weaker foreign demand).

Sustainable strategies now require long-term horizons, conservative financial planning, and strict adherence to regulatory norms.