Turkey and the conditions for exemption real estate investors from the Value Added Tax

Turkey continues to make distinguished efforts to encourage investors and businessmen, and for all those wishing to invest in Turkey in economic, real estate, tourism and other fields.

Because Turkey combines words with act, it has become the focus of attention for all investors from different countries of the world, taking advantage of the facilities granted by the Turkish government and under the directives of Turkish President Recep Tayyip Erdogan.

Among those advantages and facilities announced by the Turkish government recently, real estate investors are exempted from the "Value Added Tax", that is, an investor who wants to buy or sell and transfer ownership of a property to the buyer is exempted from paying some fees incurred by him to the state and for specific periods of time, with the aim of encouraging investment movement. In Turkey and in the real estate sector in particular.

In this article, OmranTrk company provides its clients with a detailed explanation of this tax exemption for investors and its most important conditions.

Value-added tax

  • This tax is paid once when buying a property in Turkey.
  • Its value ranges from 1% to 8% and sometimes reaches 18%.
  • Determined according to the type of property, its area, location and a number of other factors.
  • This value is not calculated from the total area of the property, but from the net area.

OmranTrk draws the attention of its clients to the fact that only those who enjoy this tax exemption are: foreign individuals not residing in Turkey, and foreign legal entities located outside Turkey. 

The most important conditions for obtaining this tax exemption are:

  • That the foreign investor is not residing in Turkey. It is also stipulated that his foreign company does not have a headquarters in Turkey.
  • Residency in Turkey does not exceed 6 months.
  • Not having a valid residence permit in Turkey.
  • There is no registered address in Turkey.Presenting a bank receipt for the value of the property purchase amount, transferred to a Turkish bank,  in dollars or euros.
  • Presenting a bank receipt for the value of the property purchase amount, transferred to a Turkish bank,  in dollars or euros.
  • In the absence of a bank receipt, a document is submitted by the Turkish Customs Administration to prove the entry of the amount from one of the Turkish airports.
  • The presence of proof that the foreign investor has stayed outside Turkey for more than 6 months, obtained from the Turkish Immigration Department.
  • Obtaining an entry and exit statement to and from Turkey from the Turkish Public Security Directorate.
  • Show proof of the investor's residence outside Turkey.
  • The investor's passport, translated and certified by the Notre.

In the event that the investors fulfill these conditions, they can go to the Turkish Title Deed (TAPU) Department in the municipality of the city to which the property belongs, and submit a request for an exemption from the real estate tax, and can also recover the previous taxes they paid when proving the eligibility to be exempted from these taxes.

After the investor submits all the required documents and papers, fulfills all conditions, and follows all the necessary steps, it can obtain a "Tax Exemption Certificate".

OmranTrk explains to its clients that the exemption from value added tax includes residential buildings such as apartments, villas, offices or workplaces, while other types of real estate such as agricultural land do not fall within the scope of this exemption.

It should also be noted that the property benefiting from the tax exemption cannot be sold again until after one year has passed. In addition to all this, the exemption from value-added tax covers only newly built properties and sold for the first time, and the exemption does not include old properties.

After the "VAT exemption" was explained especially for investors in the real estate sector in Turkey, it is necessary to give a quick overview of the types of taxes in Turkey:

Types of taxes in Turkey

Real estate title deed tax

It is paid only once when buying or selling the property, and it is paid by both the property owner and the buyer equally, and its total value is 4% of the property value.

Municipal tax

These taxes are paid annually to the municipality of the area in which the property or establishment is administratively affiliated to the borders of this municipality.

Earthquake and natural disaster insurance tax

An annual amount paid to specialized companies approved by the Turkish government, and this amount is determined according to standards, including the age and area of ​​the building.

Real estate profit tax

Which is imposed upon reselling the property again. The value of the profit is calculated by the difference in the price of the property registered in the title deed during purchase and resale.

Monthly real estate taxes

Or what is known as “revenues” are imposed on the residents of residential complexes in return for providing these complexes with various and varied services, such as swimming pools, sports clubs, security and cleaning services.

The importance of investing in Turkey

Turkey is characterized by many factors that made it an attractive production and investment center thanks to the advantages of its geographical location and costs, in addition to the economic and investment plans launched by the Turkish government under the directives of Turkish President Recep Tayyip Erdogan.

Even major European companies see Turkey as a stable investment center due to its geographical location and strong logistical infrastructure, in addition to the presence of a qualified workforce.

Turkey is expected to become one of the countries that will focus on investment during 2022, thanks to the new economic model based on investment, production, employment and export, according to official Turkish sources.

At the end of last year, President Erdogan called on all investors to take advantage of the potential and opportunities offered by Turkey, and said, "Anyone who trusts and invests in Turkey will not regret it, but on the contrary will be happy with the great profits that he will reap."

In this regard, the "OmranTRK" company, headquartered in "Yalova", assures its clients that investment doors are open in various fields, especially real estate since there are many important investment projects in "Yalova" which are supervised by "OmranTrk".

It is noteworthy that "OmranTRK", since its establishment in 2016, has been raising the slogan "The Safe Investment in heaven of earth".

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