: 2019-07-01 Modified date : 2019-07-11
We have already talked about value-added tax when buying a property in Turkey, and many decisions under this topic were already mentioned in our articles, in order to spread benefits regarding all property tax assets in Turkey.
In addition to the plans to support and activate investment in Turkey, there are some decisions, from time to time, within this framework, supporting real estate investment in particular, and in the same context came the decision to extend the tax reduction on the value of VAT when buying real estate in Turkey.
In order to encourage investors wishing to own a house in Turkey, a decision was issued to reduce VAT and Tabu expenses in Turkey at the beginning of 2019, which was due to expire soon, and then the decision came to extend it to another time.
Some days ago, the Turkish media was informed that these reductions are continuing and have been extended for the second time until the end of the year.
In a report in the Turkish newspaper: "The reduced proportion of title deed fees from 4 to 3 percent (i.e. from 40 per thousand to 30 per thousand to both the seller and the buyer) and the 8 percent VAT reduction will continue until 31 December / December of 2019 "
(KDV) A VAT is not charged to a Turkish citizen resident outside Turkey, and a foreigner who has no residence in Turkey. We have provided details of this in a previous article published by "Real Estate Ownership" entitled "Highlights on Tax Reductions in Turkey".
With the aforementioned reduction in the previously approved title deed fees, which made the tax rate 3% instead of 4% of the value of the property, those who buy a house worth 500 thousand Turkish liras will receive a reduction of 52 thousand and 500 Turkish liras thanks to these reductions.
In this context, Mr. Nazmi Durbakim, Chairman of the Association of Construction and Construction Workers in Istanbul, said:
"We have to make every effort to encourage and support sales of real estate and homes, and such cuts will have a significant positive impact on the sector, and it is very beneficial for investors to extend the duration of these cuts."
Here are some important questions about VAT information, Title deed fees, and important legal details.
(Q1): Which houses will be subject to the VAT reduction decision?
(A): The decision to reduce the value-added tax applies to houses with an area of more than 150 square meters.
(Q2): How much was the value-added tax on home sales before the reduction decision?
(A): Value added tax on home sales, which is more than 150 square meters before reduction, was equivalent to 18% of the value of the property.
(Q3): How much is the VAT rate in home sales after the reduction?
(A): With reductions to VAT, the value of home sales has become 8% of the value of the property.
(Q4): What is the value of the reduction in the title deed fees?
(A): Title deed fees reduced earlier from 20 per thousand to 15 per thousand per party, i.e., the total reduction for both parties (the seller and the buyer) is 30 thousand, which is equivalent to 3%.
(Q5): What type of real estate benefit from the decision to reduce the fees of the title deed?
(A): The decision to reduce the said taxes includes residential houses and workplaces. The decision does not include those who buy agricultural land or land for construction.
(Q6): Does the decision to reduce title deed fees include a house with floor easement?
(A): The decision to extend the reduction for the second time included houses with floor easements.
Edited by: Imtilak Real Estate ©
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