VAT Exemption for Real Estate Purchases in Turkey
VAT Exemption for Property in Turkey
There are many reasons to buy property in Turkey, one of which is the VAT (Value Added Tax) exemption. This rule came into effect in April 2017 and has been very popular since then. Since 2017, there has been a big increase in property sales in Turkey, especially in Antalya property.
Foreigners or Turkish citizens living abroad can benefit from the VAT exemption when buying property in Turkey as long as they meet some conditions. In this article, we will give you all the details about VAT exemption for property in Turkey.
VAT in Turkey
In Turkey, the VAT rate for property purchases varies according to the property size and location, and in 2024 it is between 1%, 8%, and 20%. Before 2017 all property buyers had to pay VAT on their purchases. But with the new system buyers who meet some conditions can benefit from VAT exemption. This is great news for those interested in Antalya property for sale where the demand is high.
To benefit from the exemption:
- Residency Status: The buyer must have a residence permit in Turkey but must have been outside Turkey for the last 6 months. Scientists and businesspeople who have been in Turkey for long-term projects are also exempt from VAT.
- Payment Method: The payment must be made in foreign currency.
- Selling the Property: The buyer cannot sell or transfer the property within 1 year. If the property is sold within 1 year the buyer must pay the VAT that was exempted initially plus interest.
- Turkish Citizens: Turkish citizens living abroad must have been outside Turkey for at least 6 months.
- Exemption Conditions: VAT exemption only applies to first-hand properties purchased from construction companies. Secondhand properties are subject to VAT. Only properties with official construction certificate are eligible for exemption.
VAT Exemption Application
To apply for VAT exemption the buyer must pay at least 50% of the property price in foreign currency before the sales invoice is issued. The balance must be paid within one year. If the payment is not made within the year both buyer and seller will pay the exempted VAT. However, if the buyer can prove that the delay was not their fault they do not have to pay the tax.
The buyer can apply for a VAT refund after the sale process is approved by the Land Registry Office. At this point a sales agreement is signed and the buyer must also provide the following documents:
- For Turkish citizens: A document showing they have lived abroad for at least 6 months and a work permit.
- For foreigners: Copy of passport issued by their country of residence and entry-exit records.
- For institutions with no business or profit in Turkey: Official documents showing their ongoing activities abroad and they do not generate income in Turkey.
Payment Proof and Process
During the payment process, the buyer must send the property payment in foreign currency to a Turkish bank. They must also submit the bank receipt and other documents to the relevant authorities. If the payment is made through a foreign bank using a credit card or loan the buyer must submit proof that the payment was made from a foreign bank. If the payment is made with cash brought from abroad the buyer must get a written declaration from the Customs Administration.
This is a great opportunity for those who want to invest in Turkey real estate. For those looking to invest in Antalya real estate, this is a chance to benefit from tax advantages while buying properties in high demand areas. Antalya real estate for sale properties with high returns at affordable prices.
