VAT Exemption on Property Sales to Foreigners (Article 13/1-i of the Turkish Value Added Tax Law No. 3065)

In Turkey, sales of residential and commercial properties to foreigners and certain Turkish citizens living abroad are exempt from Value Added Tax (VAT) if specific conditions are met. This exemption offers significant tax advantages for both the buyer and the seller.

The document above is the official approval certificate obtained during the VAT exemption process (personal data has been redacted).

1. Eligible Buyers 

The VAT exemption applies to:

• Foreign nationals not residing in Turkey

• Foreign companies without a permanent representative or place of business in Turkey

• Turkish citizens holding a work or residence permit and living abroad for at least 6 months

  
  

2. Type of Property

• The property sold must be residential or commercial.

• The building permit must classify the unit as “residential,” “office,” “shop,” etc.

  
  

3. First Transfer Requirement

• The exemption applies only to the first sale made by the developer.

• Second-hand sales are not eligible for the VAT exemption.

  
  

4. Payment in Foreign Currency

• At least 50% of the purchase price must be brought into Turkey in foreign currency before the invoice date.

• The remaining amount must be transferred within one year.

• Payments must be made through banks or proven with customs documentation.

  
  

5. Three-Year Holding Requirement

• A title deed annotation will indicate that the property must be held for at least 3 years.

• If sold before 3 years, the unpaid VAT and late payment interest will be collected.

  
  

6. Cases Where the Exemption Does Not Apply

• If the buyer does not meet the legal requirements

• If the property has no building permit

• If the sale is not the first delivery

• If foreign currency is not brought into Turkey or not documented

• If title deed transfer to the buyer is not completed

  
  

7. Required Documents 

 -For foreign buyers:

• Passport copy

• Document from the tax office confirming non-residency in Turkey

-For Turkish citizens living abroad:

• Residence or work permit

• Proof of living abroad for at least 6 months (approved by a Turkish consulate/embassy)

  
  

Note: The VAT exemption on real estate sales to foreigners applies only if all legal conditions are met. Professional legal assistance is strongly recommended to ensure the process is handled correctly.