Turkey allows foreign residents to make real estate deals in foreign currencies

ISTANBUL

Turkey has rolled back some restrictions on the use of foreign currencies that were brought in at the height of an economic crisis this year, according to a decree published on Nov. 16, loosening the real estate deal rules for foreign residents.

In September the government ruled that property sales, rental contracts and leases should all be made in Turkish Lira, a move President Recep Tayyip Erdoğan said would support the currency. Foreign currency had been widely used for rental deals in shopping malls and also used in real estate sales contracts.

After plunging to 6.95 liras per U.S. dollar in August, the Turkish currency has been able to mount a quiet recovery, trading at around 5.33 liras against the greenback as of Nov. 16. Still, it remains some 30 percent weaker against the dollar this year.

Under the new regulations published in the government’s Official Gazette on Nov. 16, foreign residents will be able to make real estate contracts in foreign currencies. Foreign currencies will also be allowed for rental agreements for tourist accommodation facilities and in duty-free zone stores.

The Hotel Association of Turkey had made efforts to keep the sector’s ability to do deals in foreign currency and contacted the tourism ministry regarding the issue, its head, Timur Bayındır, said in a recent speech. It was not immediately clear how much of the sector’s facilities are contracted in foreign currencies.

Last month the government announced other exemptions to the ban on using foreign currencies in business agreements, including export-related contracts, capital market instruments and employment contracts involving foreigners.