What is VAT on Property Purchases in Turkey?

Author: Luxury Estate Turkey Viewed 375 times 07 February 2025

If you're considering buying property in Turkey, understanding the Value Added Tax (VAT) system is crucial to avoiding unexpected costs. VAT on property purchases in Turkey varies depending on several factors, such as the size of the property, its type, and the buyer's status. In this guide, we’ll break down how VAT applies and whether you may qualify for exemptions.

What is the VAT Rate on Property Purchases in Turkey?

  • 1% VAT: Applies to certain residential properties under 150 m², provided they meet specific conditions set by the government.

  • 20% VAT: Applies to residential properties over 150 m² and all commercial properties.

Couple Searching Real Estate Property

Can You Buy a Property in Turkey Without Paying VAT?

While many buyers assume that VAT is waived for first-time property purchases, this is not automatically true! However, there are certain exemptions available:

1. VAT Exemption for Foreign Buyers

Foreign investors and Turkish citizens living abroad for more than 6 months may qualify for a VAT exemption under these conditions:

  • The buyer must not be a resident of Turkey.

  • The purchase must be made in foreign currency (USD, EUR, GBP, etc.).

  • The property cannot be sold for at least one year after purchase; otherwise, the VAT must be repaid.

  • The exemption applies only to newly built properties (not resale properties).

  • The buyer must obtain a VAT exemption certificate before the transaction is completed.

This exemption makes foreign investment in Turkey more attractive, especially for those buying property in Istanbul or buying property in Alanya as part of their real estate portfolio.

2. VAT Exemptions for Certain Real Estate Projects

Some housing projects, particularly those aimed at affordable housing or tourism investment, may qualify for reduced VAT rates or even full exemption. If you're interested in such projects, it's best to check with a real estate expert.

3. VAT Exemption for First-Time Buyers (Limited Conditions)

While there is no general VAT exemption for first-time buyers, certain government-backed housing projects and urban transformation projects may offer reduced VAT rates or exemptions. Eligibility depends on factors such as income level and project classification.

New build properties in Alanya

New build properties in Alanya with VAT exemption for foreign buyers.

How to Ensure a VAT-Free Property Purchase

If you're eligible for VAT exemption, you’ll need to provide necessary documentation before signing the contract. Working with a professional real estate consultant ensures that you meet the legal requirements and avoid unnecessary tax payments.

Final Thoughts

For foreign buyers and investors, Turkey offers attractive VAT exemptions that can significantly lower property costs. However, it’s essential to understand the conditions and work with a reliable real estate agency to ensure a smooth process.

In addition to VAT, investors should also consider Turkish property tax regulations and other financial aspects before finalizing their purchase.

At Luxury Estate Turkey, we help international buyers navigate Turkey’s real estate market with ease. Contact us today to explore VAT-free property options and secure your dream home in Turkey!

 

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