Turkey’s 20-Year Tax Holiday Proposal: What it Could Mean for Property Buyers and Investors

A game-changer for real estate in Turkey or a parliamentary promise? Read this before you buy

If you follow real estate in Turkey, President Recep Tayyip Erdogan’s announcement on 24 April 2026 requires attention. He unveiled a package that proposes a 20-year exemption from Turkish tax on foreign-source income and capital gains for eligible individuals who relocate to Turkey. That single line alone could change how high-net-worth buyers and investor migrants view Turkish property—but it is not law yet, and the devil will be in the legislative text.

In this analysis we explain what has been proposed, who could benefit, how the measure compares with European relocation regimes, and what buyers and investors should do now. We also set out the risks and practical next steps for anyone considering a property purchase tied to tax planning.

What the proposal actually says

President Erdogan announced the reform at the Türkiye Century Strong Center for Investment Program in Istanbul on 24 April 2026. Key points from the announcement are:

• 20-year exemption from Turkish tax on foreign-source income and capital gains for qualifying individuals.
• Eligibility requires not having been a Turkish tax resident in the previous three years.
• While the exemption would apply to foreign-source income, Turkish-source income would remain taxable.
• Qualifying individuals would benefit from a 1% inheritance and gift tax rate.
• The measure is part of a broader investment package that includes corporate tax cuts and streamlined investment procedures.

Two important legal facts to remember: the proposal has not become law and it requires parliamentary approval. The final wording in the statute will determine the precise scope, including definitions of “foreign-source” income and rules on temporary stays, dual residency, and interactions with existing tax treaties.

The broader reform package: tax cuts for business as well as individuals

The residency incentive is one element of a wider programme aimed at attracting international capital and business. Other measures announced alongside the residency tax relief include:

• Corporate tax for manufacturing exporters reduced to 9%
• Corporate tax for other exporters reduced to 14%
• Expanded tax advantages for companies operating through the Istanbul Financial Center
• Creation of a simplified one-stop office for investment procedures

These measures make clear the government’s intention to compete on cost for both business operations and wealthy individuals. For real estate investors, the package signals an attempt to pair property access with a favourable tax environment for foreign income.

How this proposal compares to Europe’s relocation regimes

When you put the Turkish proposal next to well-known European schemes, the headline number stands out: 20 years is longer than most comparable regimes.

• Italy offers a lump-sum tax regime for certain new residents, typically for up to 15 years for qualifying individuals.
• Greece operates a non-dom regime that can last up to 15 years, often tied to a €100,000 annual flat tax on foreign income.
• Portugal’s non-habitual-resident-type incentives often run for 10 years for qualifying taxpayers.

Turkey’s plan, as announced, would exempt foreign-source income rather than impose a flat lump-sum. That distinction matters for how attractive the regime is to people with large portfolios of dividends, interest, royalties, rents and capital gains. A full comparison depends on the final legislative text and any restrictions on asset classes, reporting requirements or anti-abuse rules.

What this would mean for the Turkish property market

We take a practical view: reforms like this change calculations for some buyers, but they do not guarantee an automatic price surge across the board.

Who could be most affected:

• High-net-worth individuals seeking residency or a second home while keeping foreign income untaxed in Turkey.
• Buyers in the citizenship-by-investment market: Turkey permits citizenship via real estate investment starting at USD 400,000, subject to a three-year holding requirement. A long tax holiday would make the total package—passport mobility plus tax planning—more attractive.
• Owners of high-end apartments, villas and luxury new developments in Istanbul, Antalya, Bodrum and Izmir where international buyers concentrate.

Possible market effects:

• Demand for prime properties could increase as buyers who value tax efficiency re-evaluate Turkey versus competing jurisdictions.
• Pressure might rise on luxury developments targeted at foreign buyers; this could push prices up in select micro-markets.
• Regional markets focused on local demand and domestic buyers are less likely to move quickly based on an incentive targeted at internationally mobile wealth.

Caveats and uncertainties:

• The measure applies only to foreign-source income; rental income from Turkish property would still be taxable. That distinction matters for investors who expect rental yields.
• Any rise in demand depends on how investors perceive the legal certainty of the measure and whether their home countries accept such planning without additional exit or residency taxes.
• Banks and mortgage lenders will assess borrower risk based on residency, income documentation and tax status; lending terms may not change immediately.

Our assessment is that the reform could sharpen interest at the high end of the market, but broader price movements require time and clearer legal certainty.

Who benefits — and who should be cautious

This is not a one-size-fits-all incentive. The likely winners and those who should be cautious are:

Winners

• Individuals with substantial foreign-source income who can meet the three-year non-residency requirement and who plan to rebase to Turkey.
• Investors combining residency or citizenship by investment (real estate from USD 400,000) with long-term foreign income planning.
• Export-focused companies and their executives who benefit from the corporate tax cuts announced at the same time.

Be cautious

• Middle-income buyers who derive most income from Turkish sources, because those incomes stay taxable.
• Investors who rely on rental income from Turkish property; the exemption does not cover Turkish-source income.
• Anyone who needs immediate legal certainty for cross-border tax planning—parliamentary approval and legal drafting remain outstanding.

Tax, residency and legal points every buyer should check now

You should treat the announcement as a signal, not a final rule. Before making any purchase or restructuring, check these items with Turkish and home-country advisers:

• Residency rules: how Turkish tax residency is determined, and whether part-year residency or frequent travel affects status.
• Precise definition of “foreign-source income” in the final law and whether it includes pensions, dividends, capital gains, royalties and rental income from abroad.
• Interaction with your country’s tax system, including double tax treaties and exit taxes.
• Inheritance and gift tax mechanics at 1% for qualifying individuals and whether that rate is conditional.
• Citizenship-by-investment rules: the USD 400,000 minimum investment threshold and the three-year holding requirement remain in place unless separately changed.

We advise prospective buyers to get written confirmation from tax counsel before relying on the announced incentive for deal structuring.

Practical steps for property buyers and investors now

We propose a clear timeline of actions for people who might act on this news:

• Immediate (while law is pending): monitor parliamentary activity and request drafts from Turkish legal counsel. Do not assume the announcement equals enforceable rights.
• Short term (1–3 months): consult a cross-border tax lawyer to map scenarios, including how foreign-source income would be reported and whether any home-country rules would negate benefits.
• Medium term (3–12 months): if you decide to proceed, structure offers and contracts with clauses that reflect the legal risk—conditionality to enactment, timing of residency establishment and hold periods.
• Ongoing: keep records that prove non-residency in the three years prior to moving, since the eligibility hinges on that fact.

We have seen investors rush to buy on soft signals before, and that leads to avoidable disputes when laws change.