The right to purchase real estate without the VAT is recognized for foreigners with a residence permit and living abroad for 6 months. The same rights to purchase real estate without VAT have Turkish citizens residing abroad for 6 months. The decision was announced after a meeting of the Parliamentary Assembly of Turkey. According to this decision, on sales of real estate to foreigners VAT amount is reduced to zero. In other words, foreign citizens are fully exempt from payment of value added tax if they do not resell it. In the case of re-sale exemption from VAT will be canceled and the foreign citizen will be required to pay tax in the State. So the government is trying to protect the real estate market from the illegal transactions for the purpose of speculation and easy money.
When considering the abolition of VAT on the meeting of the Turkish Parliamentary Assembly, criticisms were expressed that the exclusion from the system of Turkish citizens is not fair. Thus, it was amended to allow the same right can take advantage of Turkish citizens living abroad. Thus, the foreign citizen or companies who buy real estate in Turkey are exempt from VAT in the amount of 18%.
According to many experts in the field of real estate market, such a decision will have a positive impact on the development of building sector and real estate trading, as well as attract more foreign capital into the economy of Turkey.