Turkey to not extend 25 percent rent cap, finance minister announces

Turkish Finance Minister Mehmet Şimşek has announced that they won’t extend the 25 percent rent cap which was first introduced in June 2022 amid the soaring inflation. “Prices should not be intervened in the market,” Şimşek said. The practice will end in July 2024.

Duvar English

Turkey’s Treasury and Finance Minister Mehmet Şimşek announced on May 20 that the regulation limiting rent increases to a maximum of 25 percent won’t be extended after July 2024.

Şimşek made comments during a live TRT News broadcast. He said there was no reason for the regulation to continue as he “believes that prices should not be intervened in the market.”

“There is no work for it to continue. This regulation was made for a short time. I cannot comment on a decision that has not been made on behalf of our government, but I think it will probably not continue,” he added.

In June 2022, the Turkish parliament passed the regulation for the first time, limiting rent increases to a maximum of 25 percent for a year until July 2023 amid soaring inflation. The regulation was extended for one more year in July 2023.

“We need to ensure that prices come down through the increase in supply. For this, we attach importance to more investment, production, employment, and exports,” he noted.

Şimşek also said he did not foresee an increase in value-added tax (VAT) “except for certain exceptions.”

He also commented on the inflation projection, saying it will peak at 75-76 percent in May, but their year-end inflation forecast is at 38 percent.

According to official figures from the TÜİK, inflation in April rose by 3.18 percent in Turkey, while annual inflation climbed to 69.8 percent. However, data from the independent inflation research group ENAG showed that monthly inflation was higher at 5.02 percent, with the annual increase reaching 124.35 percent.