It is unknown presently what the exact rate of inflation will be in July 2024, however the rate of 65 percent is now mentioned in digital media.
Ending of the 25% Capping
The Government’s Code of Obligations requires the 12-month consumer price index (CPI) average to be applied to the rent increase.
The increase rate that will occur in July will be approximately 65.21 percent. If the government does not change its decision, the 25 percent increase limit on rent will end as of July 1st.
The consequence for all renters, to include foreigners, is that should the government discontinue capping housing Rents at 25% for the coming year automatically, landlords/ladies can increase monthly rent by up to 65%.
For example:
- A current rental agreement of 4 thousand 5 hundred liras will increase to 7 thousand 425 liras
- a current rental agreement of 6 thousand five hundred liras will increase to 10 thousand 725 liras
- a current rental agreement of 12 thousand liras will increase to 19 thousand 825 liras.
- A current rental agreement of 15 thousand liras will increase to 22 thousand 800 liras.
Low-income Earners
For Turkish people, millions of low-income earners – those receiving salaries and pensions – and despite an average wage increase, for some, of 20-25% they will, face a dramatic lowering of living conditions as pay increases will not be in line with inflation quoted as being in the region 65.2%.
Pensioners, who were minimum wage earners, currently receive the minimum pension which is 10 thousand liras per month. This group will not be receiving an increase according to some news outlets.
The pension of the retiree who currently receives 12 thousand liras will increase to 15 thousand 96 liras in July, and the rent of the house worth 12 thousand lira will increase to 19 thousand 825 liras.
After the raises, the monthly income of millions of workers, civil servants and retirees will not even be able to cover the rent of their homes because the gap between both is anticipated to be too wide. Currently these workers and retirees can pay their rents due to the capping at 25%.
The difference in raises:
Currently, a worker who still receives 17 thousand 2 lira minimum wage and pays 12 thousand liras rent and is left 5 thousand 2 liras.
This worker will not receive any increase in their salary in July, but his rent will increase to 19 thousand 825 liras. Therefore, to continue living in the same house, he/she will need to find an extra 2 thousand 823 lira, in addition to his/her entire salary to cover their rent.
The rent of a retired family with an income of 20 thousand liras, who receive 10 thousand liras monthly and pay rent with the monthly salary of one spouse and try to make ends meet with the other, will increase to 16 thousand 521 liras in July. After rent from two pensions, only 3 thousand 471 liras will be left.
What is the forecast pay increases to be given to civil servants and retired persons?
Based on current inflation rates, a raise of 20.3 percent for retired civil servants and current civil servants and 25.8 percent for retired workers will be given a raise in July and as already stated Minimum wage pensioners will not receive an increase.
Affects for the owners of Property being rented
While the 25 percent increase limit caused great financial loss to many homeowners, it also brought them into conflict with their tenants.
Removing the rent increase limit will create a deep gap between salaries and rent increases, and will cause homeowners, especially those whose house rents are extremely low, to succumb to inflation again.
Foreigners renting
Upon first time application and more recently, renewal of touristic residence permits, Foreigners have been requested to submit with their applications, bank statements showing income and expenditure here in Turkey. The Income required is double the national minimum wage in turkey which totals 34 thousand liras approximately.
The department of Migration want to ensure that individuals can pay rent up to 17 thousand Liras with another 17 thousand liras for living expenses each month.
Many Foreigners have ended up in disputes with landlords who tried to increase rents to over 50 and sometimes 100 percent of the current agreed rate.
It is important to maintain all paperwork and ensure financial transactions are via your Turkish bank standing order/transfer.
The Foreigners Citizen advice Centre in the Kusadasi area has a wide reach and is open to everyone near and far.
Anyone, in need of advice and support on this topic or any other topic which relates to all aspects of day to day living in Turkey not only as a resident but, as a tourist are also urged to make contact. WhatsApp 0090 5358546547 OR 0090 5318560546
