A law passed in March 2017, still continues until the end of 2020. VAT exemption on international buyers of property in Turkey still continues until at least January 2021. VAT is currently between 1% and 18% on new build property in Turkey.
This exemption for international buyers was made to incentivise international buyers to bring foreign currency into the Turkish economy, and to support the construction sector in Turkey.
Currently, 8% VAT is applied to property smaller than 150 square metres in gross size, and 18% to property larger than this.
The VAT exemption is made at source to the buyer, however the buyer must later on conclude an exemption application. There are conditions to the exemption, as follows:
- The buyer must send the purchase price as it appears on the contract from outside the borders of Turkey in a foreign currency;
- The buyer must not currently have residency in Turkey;
- The buyer will need to apply for a Turkish Tax number;
- The real estate must be kept for at least 12 months - the exemption is recorded on the registry against the title.
The exception applies to all types of property, commercial or residential, and any number of property - it is not limited to one property. The exception is only valid on brand new, first hand property, i.e. sold directly by the developer with no prior individual owner.