VAT Exemption Guidance: Save 18% When Buying Property in Turkey
Are you planning to buy property in Turkey? Don’t make a move without reading this! You can secure up to an 18% VAT exemption and purchase property at a price lower than Turkish buyers. Here’s a complete guide to understanding the VAT exemption law, prepared exclusively by Select Turkey (Turkey’s Leading Property Portal).
What is VAT Exemption in Turkey?
VAT exemption is a legal incentive introduced in Turkey to make property purchases more attractive for foreign buyers. By meeting specific conditions, you can enjoy significant savings on your real estate investment. Here are the key criteria and requirements to qualify:
VAT Exemption Conditions
- No Residency in Turkey
You cannot have a registered residence address in Turkey. Foreign buyers must reside outside of Turkey. - Limited Stay in Turkey
You must not reside in Turkey for more than 6 months in a calendar year.- Temporary stays count towards this period.
- Exceptions: Business professionals, scientists, experts, officers, reporters, and students who visit Turkey for temporary duties do not count as residents, even if they stay more than six months.
- 50% Payment Before Invoice Date
You must pay 50% of the property’s value before the invoice issuance date and the remaining 50% within one year. Make sure you pay using foreign currency brought into Turkey. - Documentation of Funds
You need to document that the payment came from abroad. Payments must pass through a bank transfer. - Credit Card Payments
You can pay with a credit card issued by a foreign bank. However, you must provide a bank receipt and a letter from the Turkish bank confirming the foreign currency payment. - Transactions After 2017
To qualify, you must transfer foreign currency after March 8, 2017, when the VAT exemption law came into effect. If you physically bring the payment, you must document the customs authorization. - Building License & Ready Property
The property must have a building license and be delivered in a ready-to-use condition with established construction servitude. - First-Time Sales Only
The VAT exemption applies only to first-time sales of the property. It does not apply to resold properties. - Land Registry Requirements
The VAT exemption must be added to the land registry records at the time of sale under Article 13/i of Law No. 3065.
Documents Required from Foreign Buyers
To qualify for VAT exemption, submit the following documents before the property’s delivery date:
- Passport Copy
- A document from the tax office confirming you are not a Turkish resident.
- Bank-approved receipts or letters that prove the payment was made from abroad in foreign currency.
Important Notes
- Submit all documents before the property’s handover.
- Follow the regulations outlined in Communiqué No. 12 (Official Gazette Issue No. 30057, 05.05.2017) to qualify.
Why Choose VAT Exemption?
By qualifying for VAT exemption, you can save a substantial 18% on property costs. This is an excellent opportunity for investors and expatriates looking to maximize their real estate investments in Turkey.
Ready to start your property journey? Visit Select Turkey for expert guidance and exclusive property listings tailored for international buyers.
FAQ About VAT Exemption
1. Can I buy multiple properties with VAT exemption?
No, the VAT exemption only applies to the first sale of each property.
2. Does the exemption apply to commercial properties?
Yes, the exemption applies to both residential and commercial properties, provided all conditions are met.
3. Can Turkish citizens benefit from VAT exemption?
No, the VAT exemption is specifically for non-residents and foreign buyers.
