Pointing out that the construction sector has not reached the desired level because of various problems, Algün Holding Chairman Cihat Algün listed his solutions for what he sees as the biggest issue: securing land for development. “In our country, obtaining land is a major problem; the costs are very high,” he said. “Many owners, especially those holding parcels in city centers, prefer to wait rather than sell. That stalls housing production. If a landowner doesn’t put the property on the market, develop a project, or otherwise utilise it, that owner should have to pay tax. A fairer valuation system should be introduced, a reasonable price determined, and the tax mechanism revised accordingly.”
Algün noted that construction is indispensable to the economy because it creates demand and jobs across more than 200 subsectors. Yet, despite this importance, the sector still struggles, largely because suitable land is so hard to find.
Turkey’s normal annual need for new homes is about one million, Algün reminded. “After recent earthquake disasters, that figure has risen much higher. Add the roughly six million risky homes that need rebuilding, and the sector’s importance is plain. Despite all this demand, supply is insufficient, chiefly because branded-housing developers face huge difficulties sourcing land. That’s why the state must prioritise measures to lower land costs if we hope to achieve the necessary urban renewal.”
“Idle plots disrupt production”
“Land is the fundamental raw material of housing,” Algün said, “but securing it has become extremely difficult in Turkey.”
He continued: “Land prices are sky-high. Most landowners belong to upper-income groups, and instead of selling plots—particularly those in city centers—they choose to sit tight. That wait-and-see approach stalls housing production.
“To solve this, an ‘idle-land tax’ should be introduced. If an owner doesn’t sell, develop, or partner with a firm to use the land, a set percentage tax should be levied. The rate ought to rise step-by-step each year so plots don’t sit unused for long.”
“A new tax system is needed”
“Today, there’s a huge gap between a plot’s declared value and its true market value. We need a fairer appraisal method, a realistic valuation, and a tax regime built on that figure.
“For example, in year one a tax equal to 10 percent of the assessed value could be charged; if the land still isn’t utilised, the rate could climb in later years to 20 percent, then 30 percent.
“In the same way, a multi-property tax could be applied to people who own multiple dwellings but keep them off the market. That would both encourage housing production and create a more balanced supply-demand structure in real estate.”