Information about exemption from real estate tax in Turkey

Learn about the most important information about real estate tax in Turkey and what are the cases of exemption from it..as well as its types..

Exemption from real estate tax in Turkey, in this article we will explore together important information and take a look at the scope of application for this exemption and the conditions and requirements to benefit from it, we will also address the categories eligible to benefit from this exemption and including foreigners not residing in Turkey, foreign legal entities and Turks not residing in Turkey.

A glimpse of the real estate tax exemption in Turkey

Exemption from real estate tax in Turkey means that the value-added tax is reduced or canceled on the purchase of real estate in Turkey for foreigners and Turks residing abroad for a period of more than 6 months and this law was issued at the beginning of 2017 with the aim of encouraging them to increase purchases and investments in the real estate sector in Turkey.

Tax exemption in Turkey includes the abolition of value-added tax when purchasing real estate and the rate of this tax is usually 18% for commercial real estate such as shops and offices, and ranges between 1% and 8% and 18% for residential real estate.

The tax exemption in Turkey excludes some costs and taxes other than value-added tax, and among these costs that are not covered by the tax exemption: ownership transfer costs, annual taxes related to real estate, service fees and monthly subscriptions and the exemption applies only to the value added tax associated with the purchase of real estate.

Conditions for exemption from real estate tax in Turkey

There must not have been a previous presence in Turkey for a period of six consecutive months, and transfers of amounts in either US dollars or Euros are accepted and the residence document outside Turkey must be confirmed by submitting an official document bearing the address of the concerned person abroad and you must also visit the Immigration Department to obtain a document proving that you have not resided in Turkey for a period of six months, and you must go to the Public Security Directorate to obtain a detailed document indicating the entry and exit movement from Turkey.

How to obtain exemption from real estate tax in Turkey?

People benefiting from the real estate tax exemption in Turkey must visit the Land Registry Department of the real estate municipality and submit an application for the exemption and these people can recover amounts they previously paid as property tax after proving their eligibility for exemption, and those refunds must be made within five years from the date the exemption application was submitted.

As for the papers required to obtain the property tax exemption, they include a bank receipt proving the transfer of funds from outside Turkey to a local bank, or an official document proving that the amount was entered through the Turkish airport, and those amounts must be in US dollars or euros and a document proving residence outside Turkey must also be submitted by indicating an officially approved address of the person abroad, and the Immigration Department must be visited to obtain a document proving that there has been no residence inside Turkey for a period of six months and in addition, one must go to the Public Security Directorate to obtain a detailed document that records entry and exit movement to and from Turkey.

Who is entitled to exemption from real estate tax in Turkey?

In addition to non-resident foreigners in Turkey, foreign legal entities that are not headquartered in Turkey, and non-resident Turks in Turkey who are exempt from VAT, there are other tax exemption cases and the only house whose area does not exceed 200 square meters and whose owner does not enjoy any other winter or summer house and does not occupy any share in another house is darkened, and Turkish law also provides the possibility of exemption for certain social groups when they own only one house and regardless of its area, these categories include: housewives, widows, orphans, people with special needs, relatives of warriors, martyrs, and retirees.

What are the taxes imposed on real estate in Turkey?

Let's get acquainted with the taxes imposed on real estate in Turkey:

There are real estate taxes that are paid once in Turkey, and they include:

Real estate registration tax, or what is known as the Tabu tax: It amounts to 4% of the value of the property registered in the title deed, and these costs are divided equally between the seller and the buyer, unless the two parties agree to a different agreement, such as the buyer agrees to pay the tax in full or the seller agrees to bear it completely.

Value Added Tax in Turkey: This tax is paid once when buying a property in Turkey, and its rate ranges between 1% and 8%, and sometimes it can reach 18%, and its value depends on the type of property, its area, location, and other factors, and it is not calculated on the total to the area of the property, but to the net area and exemption from value-added tax includes non-resident foreign investors in Turkey, foreign companies that are not headquartered in Turkey, as well as non-resident Turks in Turkey.

Other annual taxes include:

Annual real estate tax: Its value is set at 2% of the value of residential real estate in major cities, and at 1% for real estate outside major cities.

Common questions

What is the real estate tax exemption in Turkey?

Exemption from real estate tax in Turkey is the reduction or abolition of the payment of taxes related to real estate for a specified period for specific categories of investors.

Who is entitled to benefit from the real estate tax exemption in Turkey?

Foreigners who are not residents of Turkey, foreign legal entities that are not domiciled in Turkey, and Turks who are not residents of Turkey can benefit from the exemption.

What are the conditions necessary to benefit from the real estate tax exemption in Turkey?

Some of the common conditions include the investor owning only one residence, not owning any other residences such as winter or summer homes, and meeting other legal requirements specified in Turkish tax laws.

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