Türkiye has become a popular location for foreigners seeking to purchase real estate. In recent years, the Turkish government has taken several measures to simplify the process of purchasing real estate for foreign investors. One such measure is the VAT exemption applicable to qualifying purchases of real estate in Türkiye.
In this article, the term foreigner is used to describe a person who resides abroad for more than 6 months in a calendar year. As Bayraktar Attorneys, we specialize in international law and regularly assist clients with exactly this kind of cross border property transaction. Turkish citizens who reside abroad can also benefit from the VAT exemption, as many times as they wish, as long as they reside abroad and meet the conditions described below.
Quick Answer: Non-resident buyers of Turkish real estate can qualify for a VAT exemption on the purchase of a first-delivery residential or commercial property, provided the payment is brought from abroad and the property is kept for at least three years, not one year as older sources sometimes state, since this holding period was extended from one year to three years effective 1 May 2022. Selling before the three year period ends triggers repayment of the exempted VAT together with deferral interest. The exemption is based on non-residency, not nationality, so Turkish citizens who genuinely live abroad can also qualify.
VAT, Value Added Tax, KDV in Turkish, is a tax imposed on the sale of goods and services. In Türkiye, the VAT rate varies based on the nature of the goods and services sold; for instance, the VAT rate on food and beverages differs from the VAT rate on electronics. For a broader overview, see our guide to understanding VAT in Turkey.
The VAT rate applicable to a real estate delivery in Türkiye depends on the type of property, its size, and, importantly, the date the building permit for the project was obtained. The commonly cited simplified rule is as follows, and it applies in full to projects built under a building permit obtained after 1 April 2022:
This simplified area based rule does not apply uniformly to every residential property on the market. For projects built under a building permit obtained before 1 April 2022, the applicable rate historically also depended on the declared land unit value, arsa birim metrekare değeri, of the plot the building sits on, particularly in metropolitan municipalities, and could range from as low as 1 percent to as high as 20 percent depending on that land value, even for properties under 150 square meters. This distinction matters in practice more than it might first appear: a resale property, or a property whose first delivery is delayed for years after construction as described in section 3.1 below, is likely to have been built under an older permit, meaning the simple 10 percent and 20 percent figures should not automatically be assumed without first confirming the permit date and, where relevant, the land value bracket that applies to that specific project.
To illustrate, two otherwise similar 120 square meter apartments in the same city could carry meaningfully different VAT rates on their first delivery: one built under a building permit obtained in 2023 would generally fall under the simplified 10 percent rate described above, while a comparable unit built under a 2019 permit in a metropolitan municipality with a high declared land unit value could, depending on that value bracket, be subject to the full 20 percent rate despite being under the 150 square meter threshold. Buyers evaluating multiple properties should ask specifically for the building permit date and, where applicable, the land value bracket, rather than assuming a uniform rate across comparable looking listings.
Qualifying buyers of real estate in Türkiye are eligible for a VAT exemption. This means that they do not have to pay the VAT that is normally applied to the property's purchase price. The exemption applies to both residential and commercial properties.
Although commonly referred to as a VAT exemption for foreigners, this terminology is not technically accurate; what truly matters is residency status, not nationality. The exemption is granted under Article 13/i of the VAT Law, Law No. 3065, to foreign nationals not resident in Türkiye, to legal entities without a registered office or place of business in Türkiye that do not earn income there through a workplace or permanent representative, and, notably, to Turkish citizens who have lived abroad for more than six months under a foreign work or residence permit. This is one of several incentives that make property purchases for foreigners in Turkey attractive.
This rule is often mistaken as requiring that the property be brand new. Although the VAT exemption in practice mostly applies to newly built properties, what actually matters is the first delivery. For instance, if the construction company rents the property to someone else for 10 years after it has been constructed, the VAT exemption remains possible because the property will be sold for the first time after those 10 years; even though it is not new, the first delivery occurs at that later point. Second-hand properties, meaning properties that have already been sold once before, are not eligible for the exemption.
The property must be registered to the name of the qualifying buyer, and the buyer must keep the property for at least three years from the date of registration. This holding period was extended from one year to three years by regulatory change effective 1 May 2022, and buyers relying on older articles or informal advice referencing a one year holding period should be aware this figure is no longer current. The title deed carries an annotation recording this restriction, and the land registry directorate is notified accordingly at the time of the exempt sale.
This annotation is not merely a formality; it functions as a standing flag on the title itself, meaning any subsequent attempt to transfer the property within the restricted period will be visible to the land registry directorate processing that later transaction, which in turn triggers the notification and repayment process described in section 4 below. Buyers should not assume that simply avoiding formal notification of an early sale will prevent the repayment obligation from being identified.
The VAT exemption is only available to buyers who do not have a residence in Türkiye for tax purposes. In practice, this means the buyer must stay abroad for more than 6 months in a calendar year, consistent with the general residency definition used throughout Turkish tax law.
The payment for the property must be made with money brought from abroad, either in cash or via bank transfer. The cash option requires a declaration at the border. Buyers should retain documentation such as the foreign currency purchase certificate, Döviz Alım Belgesi, to evidence that the funds genuinely originated abroad, since this document is generally what the tax office relies on when confirming eligibility for the exemption.
Where a property acquired under this exemption is sold before the three year holding period has elapsed, the VAT that was originally exempted becomes payable, together with deferral interest calculated in the same manner as tax deferral interest under Article 48 of Law No. 6183. This is not a minor administrative formality; the land registry directorate is notified of the annotation restricting disposal at the time of the exempt sale, and a disposal within the restricted period triggers this repayment obligation as a matter of course rather than only upon discovery. Buyers who anticipate needing liquidity or flexibility to sell within three years of acquisition should factor this real financial exposure into their investment planning before relying on the exemption.
The VAT exemption offers several benefits to qualifying buyers of property in Türkiye. The most obvious benefit is cost savings. The general VAT rate in Türkiye is currently 20 percent, which can represent a significant amount for high value properties, and even the reduced 10 percent rate that applies to smaller residential units under the newer permit system is a meaningful saving when it is eliminated entirely.
In addition to cost savings, the VAT exemption can also make the process of buying real estate more straightforward for qualifying buyers, since removing the VAT calculation and payment step simplifies the transaction. This can help attract more foreign investors to the Turkish real estate market. For a wider perspective, explore our insights on foreigners' real estate investment in Turkey.
In practice, claiming the exemption generally follows a specific sequence rather than happening automatically. The seller, typically the construction company or original developer, needs to apply to its local tax office for an exemption letter confirming the sale qualifies under Article 13/i before or as part of finalising the transaction. The buyer needs to provide proof of non-resident status, and the payment, once made from abroad and properly documented, needs to be matched against the transaction at the tax office. Only once these steps are completed does the title deed transfer proceed on an exempt basis, with the three year disposal restriction annotated at that same time. Buyers who arrange financing or payment timing without first confirming the seller has initiated this process risk delays that can affect closing timelines, particularly where the payment needs to arrive from abroad within a specific window relative to the invoice date.
Three years from the date of registration, not one year. This was extended from one year to three years effective 1 May 2022.
The originally exempted VAT becomes payable, together with deferral interest, since the title deed carries an annotation recording the disposal restriction that the land registry directorate enforces.
Residency, not nationality. Both foreign nationals and Turkish citizens who genuinely reside abroad for more than six months a year can qualify, provided the other conditions are met.
Not necessarily. What matters is that the sale represents the first delivery of the property, which can occur even years after construction if the property was rented out rather than sold in the meantime. A property that has already been sold once before, however, does not qualify.
Yes. Unlike some other investment based incentives, qualifying Turkish citizens residing abroad can use this VAT exemption as many times as they wish, provided each purchase independently satisfies the conditions.
The payment must be brought from abroad, either as cash declared at the border or via bank transfer, and documented, typically through a foreign currency purchase certificate, to evidence its foreign origin.
No. It applies fully to properties built under a building permit obtained after 1 April 2022. For older permits, the applicable rate can also depend on the land's declared unit value and may range from 1 percent to 20 percent regardless of the property's size.
Yes, both residential and commercial properties can qualify for the exemption, provided the other conditions, including first delivery, non-residency, and payment from abroad, are satisfied.
The foreign currency purchase certificate is central, alongside proof of non-residency status and the property's registration in the buyer's name, since these documents are what the tax office relies on to confirm the exemption applies.
Yes, provided the company does not have a registered office or place of business in Türkiye and does not earn income there through a workplace or permanent representative, in addition to meeting the other standard conditions.
Holding period rules generally apply based on the regulation in force at the time of the relevant purchase, so buyers with questions about a purchase completed before the 1 May 2022 change should confirm the specific rule that applied to their transaction rather than assuming the current three year period applies retroactively.
A qualified real estate agent and attorney familiar with current VAT Law provisions and the specific building permit history of the target property, since the applicable rate and exemption conditions can vary meaningfully between properties that look similar on the surface.
The VAT exemption on qualifying real estate purchases in Türkiye remains an attractive incentive for non-resident buyers, whether foreign nationals or Turkish citizens living abroad. The Turkish government has made purchasing real estate more accessible and affordable by eliminating the VAT requirement for buyers who meet the conditions, but those conditions have themselves changed over time, most notably the extension of the minimum holding period from one to three years, and getting them right matters given the real financial exposure that follows from an early disposal. Buyers should also not assume every property carries the same VAT rate profile before the exemption is even applied, since the building permit date and, for older projects, the land value bracket can meaningfully change what would otherwise have been owed. If you are a non-resident looking to purchase property in Türkiye, it is essential to work with a qualified real estate agent and attorney who can guide you through the process and confirm that you meet all current requirements for the VAT exemption before you commit to a purchase.
Documents referenced in this article, free to download.
Understanding VAT Exemption Applied to Real Estate Purchases for Foreigners (Non residents) in TurkeyDownload
