Turkey has introduced a 20-year exemption on foreign income and capital gains for qualifying new tax residents, creating a potential link between Turkish tax residency, citizenship by investment, and Istanbul real estate. The opportunity depends on eligibility, the route used to establish residence, and whether the chosen investment can preserve value and generate income.
Turkey’s 20-year foreign-income exemption
The new regime allows qualifying Turkish tax residents to keep foreign income and capital gains outside the Turkish tax base for 20 years.
To qualify, a person must become a Turkish tax resident and must not have had:
- Turkish domicile in the previous three years
- Turkish tax liability in the previous three years
The regime is described as having:
- no minimum investment requirement;
- no language test;
- no nationality bar;
- retroactive effect from January 1, 2026.
The exemption may be accessed through residency itself, which can be established through Turkey’s citizenship by investment program, a residence permit, or a work permit. However, the article notes that Turkey’s Ministry of Treasury and Finance has not yet published the implementing communiqué, so some operational details, including visa-type eligibility, remain pending.
Why timing matters
The article links the timing of the regime to instability affecting Gulf financial hubs during the 2026 Iran conflict. It says capital that had treated Dubai and the wider Gulf Cooperation Council as a default base began looking for alternatives, and Turkey moved to attract that flow.
The article also suggests that if demand follows the pattern of favorable tax regimes in Greece, Italy, and the GCC, investors from the United States and Europe may also consider Turkey.
Citizenship by investment as a residence route
Turkey’s citizenship by investment program is presented as a direct citizenship route rather than a residence-only program. According to the article, more than 13,000 main applicants have been naturalized since 2018.
The program has no physical-presence or language requirement.
Investment routes include:
- US$400,000 property purchase;
- US$500,000 fixed capital investment;
- US$500,000 bank deposit;
- US$500,000 government bonds;
- US$500,000 fund shares;
- US$500,000 private pension route.
For real estate, the minimum qualifying purchase is US$400,000, held for three years. The article frames real estate as the most natural route for many investors because it can meet the citizenship threshold while also potentially appreciating and producing income.
Istanbul real estate and serviced apartments
Istanbul is described as Turkey’s largest and most international city, as well as its most active property market and the busiest market for foreign buyers.
The article distinguishes between ordinary apartments and professionally managed serviced residences:
- A standard apartment may offer capital appreciation and long-term rental yield.
- A serviced residence may add hospitality-style nightly rates, professional management, and booking-system-driven occupancy.
- Income can continue whether or not the owner is in Turkey.
The article cites Istanbul’s average of 16 million tourists per year as part of the demand case for hospitality-oriented property.
It also notes that serviced apartments have expanded across Europe, the GCC, and East Asia as investors seek assets combining management, income, and lifestyle use. Tighter short-term rental rules are described as pushing demand toward branded operators working within regulations.
Example: Ando Living Tomtom House
The article uses Ando Living’s Istanbul project as an example of the serviced-apartment model.
Concrete details given include:
- Ando Living was founded in 2019.
- Its property-management arm runs more than 2,000 apartments across Portugal.
- It has hosted more than 500,000 guests.
- It has processed more than 175,000 bookings.
- It has generated roughly US$85 million for property owners through its yield-management system.
The Istanbul project, Ando Living Tomtom House, is located in Beyoğlu, in the historic Tomtom district. The area is described as walking distance from Galataport, Karaköy, Galata, and İstiklal Avenue, with year-round footfall and a concentration of galleries, design boutiques, and restaurants.
The article’s investment argument is that a managed residence in a high-demand Istanbul district can potentially serve three purposes at once:
- meet citizenship investment requirements;
- hold value;
- generate income while the owner is outside Turkey.
A conventional apartment, by comparison, is described as potentially achieving only some of those goals.
Key cautions
The tax exemption depends on Turkish tax residency and a clean three-year non-residence record. Anyone with recent Turkish domicile or tax liability should confirm eligibility before relying on the regime.
Some practical details remain unclear because the implementing communiqué has not yet been published.
US citizens face an additional caveat: the article notes that the Turkish exemption may not remove exposure to the IRS, because Americans are taxed on worldwide income regardless of residence. For US investors, Turkish relief may therefore be only one part of a broader plan, not a complete tax shelter.
Turkey’s offer combines a long foreign-income exemption, direct citizenship by investment, and access to Istanbul’s property market. The practical decision is whether the investor can qualify for the tax regime, obtain a durable right to remain, and choose an asset that is not only eligible for citizenship but also capable of preserving value and producing income.
Source article: www.imidaily.com
