From January 6, 2022, applicants for Turkish "golden" passports will not be able to hold investments in hard currency. All investments will be converted into Lira.
Until recently, applicants for Turkish citizenship under the investment program could freely invest in real estate, bonds or bank deposits in both lira and foreign currency. Now the authorities are stimulating the flow of US dollars, euros and other currencies with a stable exchange rate into the country, so investors are encouraged to deposit the entire amount in foreign currency.
However, when conducting a transaction, conversion into lira cannot be avoided. That is, for example, it will not be possible to come to the bank with dollars and in three years to withdraw the same amount in dollars from a foreign currency account: investment deposits will be opened only in lira. Although the terms of the program remained pegged to the dollar: USD 250,000 for real estate and USD 500,000 for other asset classes.
With the new rules for real estate buyers, the course of the transaction has not changed: previously, the currency was always converted into lira when paying for the purchase, as it is now. For those who invest in a bank deposit or government bonds, inflationary risks are higher, since the lira is less stable than the US dollar or euro. In practice, the only thing that will be added to the investor's actions is the purchase of lira for USD 500,000 in a local bank before concluding a deal.
A deposit in Turkey for three years or investing in bonds will now seem to many less attractive options. Perhaps the new rule will contribute to overheating of the real estate market.