VAT exemption for foreign buyers in Turkey: who qualifies and how it works
How the VAT exemption for foreign buyers in Turkey works on a first sale by a developer: eligibility, the foreign-currency payment rule, the deed annotation and the three-year holding period.
A new apartment bought from a developer in Turkey normally carries VAT on top of the agreed price, and the rate can reach 20%. A VAT exemption for foreign buyers in Turkey removes that charge, but only when the buyer, the property and the payment all meet conditions set in Article 13/1-i of the VAT Law. This guide explains each condition in the order a developer checks them, so you know before you reserve whether the exemption is realistic. Every other purchase cost is listed in our guide to costs and taxes when buying property in Turkey.
In brief
- The exemption applies only when the company that built a home or workplace sells it for the first time; resales between private owners carry no VAT anyway.
- Eligible buyers are foreigners not settled in Turkey, Turkish citizens based in another country for over six months under a permit issued there, and foreign companies with no business base in Turkey.
- At least half of the price must arrive from abroad in foreign currency and reach the developer before the invoice is issued; the rest must follow within one year.
- The deed carries an annotation, and selling within three years means paying the VAT that was not charged, plus interest, before the transfer.
VAT exemption for foreign buyers in Turkey: what it covers
The rule was added to the VAT Law by Law No. 6824 and has applied since 1 April 2017. It covers residential units and workplaces, so an office bought from the developer can qualify as well as an apartment. One buyer may use it for several units.
The key word is first delivery. The exemption is available only when the company that constructed the building sells the unit for the first time. A flat that an investor bought from the developer and now resells is outside the rule, and so is a unit that a landowner received under a land-for-flats agreement and sells on. In practice, therefore, the exemption is a new-build question; our comparison of new-build and resale property sets out the other differences.
Who counts as a qualifying buyer
Three groups can use the exemption. First, foreign nationals who are not settled in Turkey. Under Turkish tax law a person who stays in the country for more than six continuous months in a calendar year is treated as settled, with limited exceptions for people here on a temporary assignment, for study or for treatment. Second, Turkish citizens resident in another country for over six months under a work or residence permit issued there. Third, companies whose legal seat and business centre are outside Turkey and which earn no income here through a workplace or permanent representative.
This has a practical consequence that surprises many buyers. A foreigner who already lives in Istanbul on a residence permit and has spent most of the year in the country is usually treated as settled, and so cannot use the exemption. The developer asks for proof before the sale: for foreign individuals, a passport copy and a certificate of non-residence from the tax office where the property is located.
The foreign-currency payment rule
The price must be paid with foreign currency brought into Turkey. At least 50% of it has to arrive and be paid to the developer before the sale invoice is issued, and the balance must follow within one year of the invoice date. A transfer from a foreign bank account to a Turkish bank is the normal route, and the bank receipt is the evidence. Cash carried into the country must be declared at customs, and that declaration becomes the proof.
The developer may receive Turkish lira at the end of the chain, but the money must demonstrably originate abroad. If a relative or a company pays on your behalf, the transfer should name the project and the unit, or the payer should sign a declaration linking the payment to your purchase. Payments made from a Turkish account funded locally do not meet the rule.
| Condition | What is checked | Typical evidence |
|---|---|---|
| First delivery | Seller is the company that built the unit | Building permit, developer invoice |
| Buyer status | Not settled in Turkey (six-month test) | Passport copy, tax office non-residence certificate |
| Payment before invoice | At least 50% from abroad in foreign currency | Incoming transfer receipts or customs declaration |
| Balance | Remaining amount within one year of the invoice | Further transfer receipts |
| Deed | Exemption noted at the land registry | Annotation on the title record |
| Holding period | No sale for three years | Annotation removed after three years |
The deed annotation and the three-year rule
When the title deed is transferred, the developer informs the land registry that the sale was exempt, and an annotation is entered on the record. Originally the holding period was one year; since 2022 it is three years. A sale inside that window makes the uncharged VAT payable, together with deferral interest, and the land registry does not complete your sale until the tax office confirms payment. After three years the annotation no longer has this effect.
If the conditions turn out not to have been met, for example because the buyer was in fact settled in Turkey, the tax office can claim the VAT together with a penalty and late-payment interest, and the buyer is jointly liable with the developer. For this reason, a careful developer checks your status and payment trail before agreeing to invoice without VAT.
How much the exemption saves
The saving equals the VAT that would otherwise apply, and that depends on the unit. Housing VAT in Turkey is 1%, 10% or 20%, depending on the building permit date, the net area of the unit, with a threshold at 150 square metres, and in some cases the location, such as urban regeneration areas. For example, if 10% applies to a unit priced at USD 300,000, the VAT is USD 30,000; at 20% it would be USD 60,000. The developer states the applicable rate on the price offer, so ask for it in writing before comparing projects.
Using the exemption alongside citizenship or residence
The exemption does not conflict with a citizenship purchase. In fact, citizenship buyers usually transfer funds from abroad anyway, and they must also convert it at a Turkish bank and keep the foreign-exchange certificate the bank issues. Keep both document trails together, because the valuation report, the bank records and the invoice will all be read side by side. Our guides to the full cost of Turkish citizenship by investment and to citizenship through real estate explain the rest of that file. For a residence permit, the exemption can apply as long as you are not already settled in Turkey at the time of the sale.
Practical steps before you reserve
- Ask the developer to confirm in writing that the unit is a first delivery and which VAT rate applies.
- Check your own status against the six-month test and gather the documents the developer will request.
- Plan the transfer schedule so that at least half of the price arrives from abroad before the invoice date.
- Make sure the sales contract says which party pays the VAT should the tax office later reject the exemption.
- Keep every transfer receipt and the deed annotation for at least three years.
Our purchase support service reviews the contract, the payment plan and the developer documents with you, and you can browse current off-plan projects and ready-to-move apartments sold directly by developers. The steps of the purchase itself are in our guide to buying property in Turkey as a foreigner. VAT rules are published by the Revenue Administration (GİB).
Frequently asked questions
Is VAT charged when a foreigner buys property in Turkey?
Only on a first sale by a developer, and even then a non-resident foreign buyer can be exempt if the price is paid with foreign currency brought from abroad. Resales between private owners carry no VAT.
Can I use the VAT exemption if I live in Turkey on a residence permit?
Usually not. A person who stays in Turkey for more than six continuous months in a calendar year is treated as settled for tax purposes, and settled buyers fall outside the exemption.
How much of the price must be paid before the invoice?
At least 50% must arrive from abroad in foreign currency and be paid to the developer before the invoice date. The remainder must follow within one year of the invoice.
What happens if I sell within three years?
You first pay the VAT you were spared, with deferral interest, and the land registry completes your sale only after the tax office confirms payment.
Does the exemption apply to offices?
Yes. The rule covers both residential units and workplaces, provided the sale is the first delivery by the company that built them and the other conditions are met.
Can I buy more than one property with the exemption?
Yes. The rule sets no cap on how many units one buyer acquires, but each sale must meet the payment and status conditions on its own.
Is the VAT exemption compatible with Turkish citizenship by investment?
Yes. The two sets of rules run in parallel: funds arrive from abroad for the exemption, and for citizenship they are converted at a Turkish bank, which issues the foreign-exchange certificate. Keep both document trails together.
