VAT Abolished on Property Sales to Foreigners
A new law (passed at the end of February) means that overseas buyers are now exempt from paying VAT on their Turkish property purchases.
This move has been welcomed by the Turkish real estate industry – the abolition of this 18% tax represents significant savings for overseas buyers and it is likely that sales to foreigners will increase as a result.
Head of the Istanbul Constructors’ Association Nazmi Durbakayim said the tax exemption was a “wise move”, adding that ‘’this will give a serious boost to the sector.”
He went on to say the move would serve as a catalyst to spur undecided buyers into action. “When you throw a small fish in the aquarium, the entire aquarium is stirred up. Even the passive fish take action – we need to look at it this way. An act here will set undecided purchasers abroad in motion. The movement in the market will cause the buyer to come forward, saying ‘I don’t want to miss this opportunity’.”
This VAT exemption applies to both residential and commercial property, providing the property is purchased with foreign currency and that the asset is retained for a minimum of 1 year.
Property Sales increse in January
Property sales increased by 12.8% compared to January of last year, according to Turkish Statistical Institute.
A total of 95,389 properties were sold, with 1,386 of these purchased by overseas buyers – once again, Istanbul and Antalya (including Alanya) were the top 2 regions for overseas buyers.