Tax exemption for real estate investor – VAT in Turkey
The Turkish state continues to provide effective efforts to encourage investors, entrepreneurs, and those wishing to invest in real estate in Turkey , as well as industrial and commercial investment
Turkey’s geographical location has greatly contributed to facilitating the current Turkish government’s plan to turn Turkey into a country that attracts foreign investments, especially the Arab Gulf states.
At the present time, Turkey has become one of the most prominent countries that provide ideal advantages for those wishing to invest in real estate in Turkey, and one of the most beneficial of these advantages is obtaining Turkish citizenship .
The Turkish government recently announced the exemption of real estate investors and those wishing to buy a property in Turkey from value-added tax
This means that real estate buyers are exempted from fees paid to the state for specific periods, and this decision comes in light of the Turkish government’s continuing to facilitate the movement of real estate investment in Turkey.
Value Added Tax in Turkey – Real Estate Taxes
This tax is paid once when buying a property in Turkey
Its value ranges from 1% to 8% and sometimes reaches 18%.
The tax is determined according to the type of property, its area, geographical location and other factors, in addition to that
This value is not calculated from the total area of the property, but only from the net area
Conditions for obtaining tax exemption in Turkey – for the real estate investor
- That the investor is not residing in Turkey, and that his company is not based in Turkey.
- Residency in Turkey does not exceed 6 months.
- Not having a valid residence permit in Turkey.
- There is no registered address in Turkey.
- Submit a bank receipt for the value of the property purchase amount, after this amount is transferred to a Turkish bank in US dollars
- The presence of proof that the foreign investor has resided outside Turkey for more than 6 months, and this proof is obtained from the Turkish Immigration Department.
- Obtaining a movement statement to enter and exit the Turkish Public Security Directorate.
- Show proof of the investor’s residence outside Turkey.
- The investor’s passport, translated and certified by the Notary Public (Notary)
In the event that the real estate investor fulfills these conditions, he must go to the property department in the municipality in which the property is located and submit a request for exemption from real estate tax, and he can also recover any previous tax if he proves the right to be exempted from previous taxes
After submitting the aforementioned documents, the investor obtains a tax exemption certificate
It is important to know that the property that benefits from tax exemption in Turkey can only be sold after a full year has passed, and also to know that the tax exemption includes newly established properties and does not include old properties
Types of taxes in Turkey
- Real estate tax:
It is paid only once when buying or selling the property, and the property owner and the buyer pay it equally, and its total value is 4% of the total property value.
- municipal tax
These taxes are paid annually to the municipality of the property (the property is administratively dependent)
- Earthquake and Natural Disaster Insurance Tax
An annual amount paid to specialized companies approved by the Turkish government, and this amount is determined according to certain criteria, including the age of the building, its area and geographical location
- real estate profit tax
It is imposed when the property is resold, and the profit value is calculated by the difference in the price of the property registered in the property department during purchase and resale
- Monthly property taxes
Known as “revenues”, it is imposed on the residents of residential complexes in return for providing these complexes with various and various services, such as swimming pools, sports clubs and security services.
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