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Highlights on Real Estate Tax Cuts In Turkey

Tax cuts are an effective means for the economic decision-maker to stimulate the local economy as well as a motive for attracting foreign investment

Highlights on Real Estate Tax Cuts In Turkey
2019-05-07 Last update 2020-02-13

Highlights on Real Estate Tax Cuts In Turkey

Tax cuts are an effective means for the economic decision-maker to stimulate the local economy as well as a motive for attracting foreign investment.

In the real estate investment sector, real estate tax reductions for foreigners in Turkey are the focus of attention for the foreign investor in particular. In this article, we look at the details of real estate tax cuts in Turkey.

What real estate benefits from tax cuts?

The exemption from VAT in Turkey applies to every residential property or workplace identified in a building permit as a house, dwelling, shop, office, floor apartment when sold for the first time only.

All types of properties listed above must be attached by a floor easement bond and ready for use by the buyer who will receive them.

Who benefits from these tax cuts?

  • Turkish citizens living abroad for more than six months provided they have an exit and work permits.
  • Non-resident foreign nationals in Turkey.
  • Legal persons and institutions.

What are the required documents or papers?

  • Proof of sale of the property for the first time.
  • An official residence or work permit proves that the buyer is a resident of Turkey residing abroad or foreigners who are not resident in Turkey.
  • Photocopy of passports of foreigners, in addition to documents proving the continuation of foreign companies in which they work.

Tax cuts

How to pay the value of the property excluded from the tax?

The buyer must pay at least 50% of the price of the property before organizing the sales invoice, and then he must bring the remaining value of the property in cash to Turkey and pay it within a maximum period of one year.

If you commit to paying half of the price before the sales invoice is made, the KDV will not be charged.

How to document the price of the property?

  • In the case of sending the price in the form of a transfer to a Turkish bank, the receipt will be authenticated by the receipt of the receiving bank.
  • If a credit card is used by a bank outside of Turkey, authentication is done through the "statement" given by the bank that has been withdrawn from within Turkey.
  • If the price is transferred manually to Turkey (bag or similar), the documents will be authenticated by the customs administration in addition to a bank receipt.
  • The seller's cash price is paid in Turkish Lira.

Is there a higher limit for the price of the property excluded from the real estate tax?

The tax exemption on houses sold to foreigners is usually applied at a minimum of $ 250,000. The other types of real estate tax are excluded as mentioned above.

What should be done in the Tabu Directorate?

Upon transfer of ownership of the property in the Directorate of Tabu, it must be reported that this sale is subject to Article 13 / i of the KDV Act and under this notification the Directorate of Tabu add the words "not to be sold before a year" in the property data.

The buyer shall be informed of the amount to be collected in case of sale before a year under Article 48 of Law No. 6183, and the buyer shall sign it.

Is it a penalty if the buyer sells the property before the one year?

If the buyer sells the property before the one year or changes its ownership, he will have to pay the VAT that has been exempted from it and the interests of the delay.

Edited by: Imtilak Real Estate ©

Source: Emlak Kulasi

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