VAT Exemption on sales of property in Turkey
Turkish Government is planning to introduce exemption from value added tax on the property that has been sold to non-resident individuals and corporations. Standard VAT rate is 18% in Turkey. There are certain conditions for the exemptions.
- Property should be in the form of housing or office
- Property should be subjected to sale for the first time
- Price of the property should be paid in foreign exchange and should be transferred to Turkey
- If the buyer is individual, he/she should not be resident of Turkey
- If the buyer is a corporation, it should have neither place of corporation nor place of management in Turkey.
- If buyer is a corporation, it should not have any permanent office in Turkey.
This exemption is with zero rate which means construction companies that have sold the property will be able to deduct the input VAT related with the construction of the property.
So if you are planning to buy property in Turkey, make sure that the price does not include any VAT which means final price of the property is 18% less than the domestic sales price of the property.