Tax exemption when buying real estate in Turkey

The tax exemption decision was issued when buying real estate in Turkey in February 2017, and this decision provides for the exemption of non-resident foreigners in Turkey, and Turks residing outside Turkey for a period of 6 months or more, from value-added tax, which is a tax imposed by the government on all goods and services, and amounts to It is 18% for commercial real estate, and its rate ranges between 1% – 8% – 18% for residential real estate. For example, if the net area of the residential property is more than 150 square meters, the value added tax is 18% of the price of this property, but if the net area of the residential property is less than 150 square meters, the value of the added tax ranges from 1% to 18% Where the type of real estate, its area, building level, and meter price all play a role in determining the tax value.

 

The issuance of the tax exemption decision comes within the facilities and contributions made by the Turkish government with the aim of encouraging the purchase of real estate in Turkey. Among the facilities provided by the Turkish government is also the granting of Turkish citizenship to investors when buying a property or a group of real estate in Turkey with a value of $400,000 or more.

What are the conditions for tax exemption when buying a property in Turkey?

The buyer of the property must be a foreigner who does not reside in Turkey, or a Turk who has resided outside Turkey for 6 months or more.
The property must be new.
Not selling the property for a year from the date of purchase.
The property must be purchased in one of the foreign currencies, the dollar or the euro.
Transferring the property purchase amount from a bank outside Turkey to a Turkish bank, or entering it through a Turkish airport.

What are the papers required for tax exemption when buying real estate in Turkey?

A bank receipt of the amounts transferred to purchase the property in Turkey, or a document from the Turkish Customs Administration proving that the funds entered from a Turkish airport.
A document proving the buyer’s residence outside Turkey.

Does the tax exemption include exemption from ownership transfer costs?

No, the tax exemption does not include the exemption from the costs of transferring property ownership or other taxes and fees, it only includes the exemption from value-added tax, which is 18%.

 

What happens if the property is sold before a year has passed since its purchase?

In the event that the property is sold before one year has passed since the purchase, the tax is paid with a delayed interest, which is calculated according to the deferred interest rate.

 

What other taxes are paid when buying a property in Turkey?

Real estate title tax
This tax is paid upon registration of the title deed (Tapu) at the Land Registry Department in Turkey.

It is 4% of the property price registered in the sales contract, and the tax is usually paid equally between both the seller and the buyer, with each party paying only 2% of the tax value.

 

Municipal tax on real estate in Turkey
Turkish municipalities impose an annual fee of 0.03% of the value of the property on real estate located within the area served by the municipality, and this tax is paid in return for the services provided by the municipality.

 

Earthquake tax
It is an annual tax paid by the property owner in Turkey to insure his home against natural disasters and earthquakes, and it amounts to $2 per square meter of the property’s area.

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