VAT Exemption for Foreign Property Buyers in Turkey: Conditions and Rules
Yes, a foreign buyer can purchase property in Turkey without VAT, but only under specific conditions. Article 13/i of the Turkish VAT Law (KDV Kanunu No. 3065) exempts the first sale of a new home or office to a foreigner who is not resident in Turkey, provided the price is paid in foreign currency brought from abroad. If the property is sold within three years, the VAT that was not charged becomes payable.
What VAT Would You Otherwise Pay?
VAT on new homes in Turkey is 1%, 10% or 20%, depending on the net floor area, the date of the building permit and the land value. Commercial property such as offices and shops is charged 20%. On a new-build purchase, the exemption can therefore make a real difference to the total cost. (For how net area is measured, see gross and net square meters.)
The Exemption at a Glance
| Condition | What it means |
|---|---|
| Property | A building constructed as a home or a workplace, with a building permit, completed and handed over ready for use |
| Sale | The first delivery by the developer (not a resale) |
| Buyer | A foreign national not settled in Turkey, a foreign company without a place of business in Turkey, or a Turkish citizen living abroad for more than six months with a work or residence permit |
| Payment | In foreign currency brought to Turkey: at least half before the invoice date, the rest within one year |
| Holding period | If sold within three years, the unpaid VAT plus interest is due before the title deed transfer |
| Number of units | No limit: one buyer can buy several homes or offices under the exemption |
First Delivery of a Home or Office
The exemption applies only to the first delivery made by the party that built the home or office. If the unit was already sold to someone else and is then sold on to a foreigner, it is not a first delivery and the exemption does not apply. A title deed transfer is not required for a transaction to count as a sale: if the developer sold the unit to a second party by contract, and that party sells it to a foreigner, the exemption is not available.
The same applies to units that landowners or other parties received from a construction project and then sell. In practice, this means the exemption is for new-build property bought directly from the developer. Land, fields and plots without a building do not qualify.
The building must have a building permit and be handed over ready for use. For an off-plan purchase, the exemption is applied when the finished unit is delivered and invoiced.
Who Qualifies
Foreign individuals
Individuals who do not hold Turkish citizenship under Turkish Citizenship Law No. 5901 and who are not settled in Turkey under Income Tax Law No. 193 can use the exemption.
Under article 4 of the Income Tax Law, a person is settled in Turkey if their domicile is in Turkey, or if they stay in Turkey continuously for more than six months in a calendar year (temporary departures do not break the stay). Under article 5, some foreigners are not treated as settled even after six months: for example business people, scientists, experts, officials and journalists who come for a specific, temporary assignment, and people who stay for education, medical treatment, rest or travel.
The seller will ask for evidence that you are not settled in Turkey, usually a record of your entries and exits. If you already live in Turkey on a residence permit, check your position with the developer and a tax adviser before signing.
Turkish citizens living abroad
Turkish citizens who have lived abroad for more than six months with a work or residence permit there can also buy under the exemption.
Foreign companies
Companies whose legal and business centre are outside Turkey, and which do not earn income in Turkey through a place of business or a permanent representative, can also use the exemption. The legal centre is the one shown in the company's articles or founding documents; the business centre is where the business is actually run. Before the delivery, the seller must obtain from the buyer:
- a document from a government authority of the country where the company has its legal centre, showing that the company exists and is active; and
- a document from the tax office of that country confirming that the company's legal and business centre are not in Turkey and that it does not earn income in Turkey through a place of business or a permanent representative.
Paying the Price in Foreign Currency
This is the condition buyers most often get wrong.
- At least 50% of the price must be brought to Turkey in foreign currency and paid to the seller before the invoice date.
- The rest must be brought in foreign currency and paid within one year of the invoice at the latest.
- The developer can claim back the related input VAT only after the whole price has been brought to Turkey and paid.
How the transfer is proven:
- Bank transfer from abroad: the bank receipt. The transfer description should identify the property (project, block and unit).
- Card issued by a foreign bank: a receipt or document from the Turkish bank confirming the payment was made in foreign currency from abroad.
- Cash brought in person: the customs declaration made when entering Turkey.
Separately from VAT, every foreign buyer needs a currency exchange document from a Turkish bank for the title deed transfer, and a citizenship purchase also needs a valuation report by a licensed appraiser (see our valuation report guide).
Selling Within Three Years
Since Law No. 7394 (Official Gazette of 15 April 2022), the holding period is three years; before that it was one year. A note is added to the declarations section of the title deed saying that the VAT must be paid if the property is sold within three years.
If a home or office bought under the exemption is sold within three years, the person selling it must pay the VAT that was not charged, plus late interest under article 48 of Law No. 6183, to the tax office of the property's location before the title deed transfer. After three years (counted to the same day and month), no VAT or interest is due. The seller's responsibility for the exemption ends once the sale is completed, but if the exemption was applied when the conditions were not met, the buyer is jointly liable with the seller for the tax, penalty and interest.
When the Exemption Is Lost
- The property is a resale, not a first delivery from the developer.
- The buyer is settled in Turkey, or is a company with a business presence in Turkey.
- The price, or part of it, was paid in Turkish lira from inside Turkey, or the foreign currency transfer cannot be documented.
- The balance was not brought in within one year of the invoice.
- The property is sold within three years (the VAT becomes payable with interest).
What This Means for Buyers
- Plan the payment route before you sign. Send the money from an account abroad, in foreign currency, with the project and unit in the transfer description.
- Check the contract wording. It should say whether the price includes VAT and that the sale is made under article 13/i of Law No. 3065; the invoice must say the same.
- Plan for at least three years. If you might sell sooner, count the VAT and interest into your numbers.
- Resale homes are different. A second-hand home is not covered by this exemption.
When you buy new-build property through CCT Investments, there is no commission for you, and project visits and title deed follow-up are free. See our buyer guide, browse properties in Istanbul, or contact us with your questions. Tax rules change; confirm your own case with a tax adviser before you buy.
