The Turkish Government has abolished VAT on property purchases for foreign buyers, as the country attempts to attract more international investors.
The new law means that foreigners are exempt of VAT on the purchase of either a house or office in Turkey, with the condition that they make their acquisition payment in a foreign currency and do not sell their property for at least one year.
Passed on February 23rd, the law also applies to those Turkish citizens who have been living and working overseas for six months or more. The change has been welcomed by the property industry, which is anticipating a large increase in transactions as overseas buyers take advantage of the more favourable buying conditions.
“Tax exemption for foreigners who buy houses in Turkey is a very wise move. This will give a serious boost to the sector,” said Nazmi Durbakayım, the head of the Istanbul Constructors’ Association, as quoted by state-run Anadolu Agency.
Ali Ağaoglu, the head of the Ağaoglu Group, one of the largest construction firms in Turkey, agreed with the views of Durbakayım, stressing the move was in line with practices in other countries and was very positive for the sector.
He said foreign demand for properties in Istanbul and the Black Sea region were very high, adding that a further increase would be the case with the new law becoming effective.
The latest law change complements the Government’s other recent law change that grants citizenship to foreigners that purchase Turkish property worth at least $1mllion, and do not sell within three years.