Property VAT Exemption in Turkey

Turkey is an advantageous country for investors. In addition to high investment returns, there are many more benefits. One of the most important is VAT exemption. Foreign investors can benefit from VAT exemption in Turkey.

When buying property in Turkey, there are four main taxes. Two of them are one-time taxes, and the other two are annual taxes. One-time taxes are real estate registration tax and VAT. The annual taxes for owning property are annual property tax and earthquake and natural disaster insurance fees.

If you are asking what is a tax exemption, it is an exceptional law for not paying tax. This law is applied to foreigners and Turkish citizens who do not reside in Turkey.

Who Is Exempted from Paying Tax in Turkey?

While VAT exemption on the property is available for all foreign who have tax ID numbers, there are some conditions. These conditions are easy to follow, but the process must be followed well. VAT exemption in Turkey is applied to buyers with the following conditions:

• Foreigners that do not have residency in Turkey
• Turkish citizens that are living abroad for more than 6 months in a year
• Foreigners who do not have revenue in Turkey from a workplace or representatives

In short, foreigners who don’t have a permanent connection with Turkey and Turkish citizens living abroad can benefit from this VAT exemption. The VAT for real estate in Turkey varies between %1, %8, and %18 depending on the property’s location and features.

Requirements for Property Exempt from VAT

After being eligible for tax exemption, there are some more conditions. The building that will be bought must have a building certificate. Also, the building must be ready to be used by foreigners.

In addition, it is one of the forgotten requirements that the property must be a new build. So, second-hand properties are not exempted from VAT. If a property is a new build, it doesn’t matter if it is residential or commercial property.

According to the VAT exemption law in Turkey, %50 of the purchase value must be brought from abroad before getting an invoice. The rest amount can be brought within a year. The transfer of the money to Turkey must be proved.

The last thing to be considered is keeping the vat exempt property after purchase for at least 1 year. If the buyers sell the property without waiting 1 year, they pay the tax with the legal interest.

It is really clear to understand how tax exemption works in Turkey. The process consists of easy steps. But it is strongly recommended to get legal consultancy in order to avoid any pitfalls or misunderstandings.

Real estate tax exemption 2023 is expected to be a great year for investment. Residential properties exempt from VAT gets highly demanded by foreign investors. Turkey’s properties and tax exemptions are ideal for living and investment.

Also, there is no tax exemption limit in Turkey. So, the exemption is determined by the VAT rate of the property. In addition to all of these advantages, commercial property VAT exemption is drawing the attention of foreign investors. Turkey is the center of attention with its vibrant real estate market.

How to Get Tax Exemption in Turkey Easiest Way?

First, you should work with a reliable real estate company. They will find you the best properties suitable for your needs and VAT exemption. After, you should work with a legal consultancy company. They will ensure your rights and guide you through the entire process.

It is advised to get all legal information about the property. If you are going to buy from a construction company, you have to know that they are reliable. The contract on the property sale also must be well-prepared.

The sale of residential property VAT exempt can be a bit confusing, especially if you don’t know the process well. Throughout the whole process, it is good to have a professional consultancy.

So, normally you have to work with two different companies to conclude the process and formalities. But Tekce Visa offers one-stop consultancy from getting a tax ID number to benefiting from exemptions. It means legal professionals complete your entire process, from finding the right property to VAT exemption.

Purchasing a property abroad is not similar to buying in your own country. You have to learn and get detailed information about the law and regulations. It would be best to get tax consultations in Turkey, the local lawyers providing international legal consultation will complete all the steps on your behalf.