Last Updated on December 25, 2023 by Aydoğan Aknar
Removal of the 25% limit on rentals in Turkey!
Economist Nedim Türkmen mentioned in today’s column that, in a closed-door meeting with the press, Minister of Treasury and Finance Mehmet Şimşek announced the removal of the 25% limit on rentals.
Especially in major cities, housing rental prices have been rapidly rising. However, on July 1, 2022, the government implemented a 25% limit on housing rents. This decision led to conflicts between some landlords and tenants, resulting in numerous incidents. Economist Nedim Türkmen delved into the topic in today’s column.
In his column, Nedim Türkmen documented notes from a closed-door meeting between Minister Mehmet Şimşek and representatives of the business world. Türkmen stated that Şimşek announced the removal of the 25% rent increase limit in housing.
Last-Minute Statements from MEHMET ŞİMŞEK
Türkmen, expressing, ”I want to share important topics deduced from the answers he gave to questions directed at him during a closed-door dinner with representatives of the business and finance world three days ago,” also pointed out that he and three friends who attended the meeting gathered the shared notes.
Expressing his full support for President Erdoğan’s implemented program, Türkmen said, ”Believe it or not, I can’t comprehend your expectations for post-election. This program will continue the same way after the election; we will implement it with patience and determination.”
25% LIMIT WILL NOT BE EXTENDED!
Tele1 reported that the regulation, which set a limit of 25% on rent increases in housing rentals and was scheduled to expire on July 1, 2024, will not be extended in the coming period as it will not be needed. The government is planning different tax rates for an individual’s first and second homes, based on the value of the property. The plan considers firms’ investment projects, granting Investment Commitment Advance Credit (YTAK) through intermediary banks to those with a minimum total investment amount of 1 billion Turkish Lira. The credit comes with a maximum term of 10 years.
”We will base our pricing and future expectations not on past inflation but on expected inflation. We will continue to accumulate reserves. The most significant reason for our current account deficit is our gold imports, which reached 30 billion dollars. When you exclude the high inflation months from the calculation, you will see a decrease in inflation in the second half of 2024.”
”Bankers here are all good people, but if we don’t set rules for them, they won’t think about the country’s good; they will do what they know. Reduction of high customs duties on raw materials and semi-finished imports is not possible at this stage,” he added.