Is There VAT Discount When Buying Property

12 March 2022 Legislation

VAT exemption

On April 1, 2017, a VAT exemption for foreigners went into effect.

Foreigners will not be charged VAT when purchasing property in Turkey under the new rule.For foreigners who want to invest in our nation and obtain citizenship, a new convenience has been provided.

For foreign investors and businessmen, investing in Turkey has always been a sound and rewarding decision.In 2017, a variety of services were made available to boost foreigners' housing and investment prospects.

The Turkish government has reduced VAT for foreign investors who purchased their first homes in Turkey, after advances such as awarding citizenship to foreigners who purchase a residence for a minimum of 1 million dollars, a VAT discount, and resetting the stamp duty.

When foreign nationals purchased residential or commercial property in Turkey, they paid VAT at rates ranging from 1% to 18%. The Turkish government has now exempted foreign investors from paying the 18 percent value-added tax (VAT) on real estate purchases.

Turkish Finance Minister Naci Abal said that the selling of properties to foreigners will be exempt from VAT. "We will exclude the building companies from paying VAT if they sell a residential or commercial property to a foreign genuine person or company.

As a result, foreigners will not be charged VAT when purchasing a home or business in Turkey "he stated

Who will be helped by this regulations?

 VAT Discount When Buying Property:VAT exemption

1-Foreign citizens who have not settled in Turkey.

2-Turkish citizens who've been abroad for more than 6 months on employment and residency permits.

3-Companies that do not have an office in Turkey or do not make a profit in the country.

Important note: Turkish citizens working for Turkish organizations, companies, and institutions headquartered from outside Turkey will not be qualified for VAT exemption.

What are the requirements to qualify for the exemption?

Real estate purchased from a building company is exempt from VAT. The first delivery of buildings developed as houses or offices is free from this tax.

Foreigners and Turkish citizens residing abroad must pay in foreign currency, and they will be unable to sell real estate purchased with the benefit of a one-year VAT exemption.The exemption tax (Unpaid VAT) will be collected if the purchased real estate is sold within a year.

In Turkey,there are three different sorts of VAT rates:

1%, 8%, and 18%. In most cases, a 1% VAT rate applies to low-cost houses all around Turkey.

The VAT rates for expensive homes are 8% and 18%, respectively. The VAT rate for homes in Antalya is 1%. When purchasing a property from a building company in Istanbul, the VAT rate is either 8% or 18%.

Note: Before purchasing a home, inquire about the VAT rate with the builder or request it from us.

Turkish citizens living abroad must have certain documents.

 Documents obtained from Turkish embassies or consulates in relation to a residence permit, employment authorization, or other document in this category obtained in the country of residency.

Proof that you have been abroad for at least six months since receiving your employment and residence permit.

Foreign nationals must provide certain documents.

 A copy of the foreigner's passport issued by the nation in which he or she resides, or a copy of the Turquoise card for individuals who have lost their Turkish citizenship. A tax document stating that the person who will purchase the property is not a Turkish citizen.

Documents required for institutions who do not have a Turkish office or will not profit from doing business in Turkey.

Documents issued by the official authorities of the country in which the institution's center is located attesting to the institution's formation and operation. An apostille should be attached to these documents.

A tax document stating that the business center to be purchased is not located in Turkey and does not generate profit in Turkey.

Letter of commitment

The purchaser's commitments regarding VAT exemption are contained in a text that is published to the sales office. At the time of sale, this paper might be signed.

If you are considering purchasing a home in Turkey,please contact us to learn more about how you can save money by avoiding paying VAT.AKDinvest the best of invest

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