A new law in Turkey will mean that foreign property buyers will no longer have to pay VAT on a property purchase.
The law, which was passed last week, will also apply to Turkish citizens who have been living and working overseas for six months or more.
Foreign buyers won’t have to pay VAT on their first property, residential or commercial, so long as they purchase it with money raised overseas and don’t sell it on within 12 months. The purchase must also be made in foreign currency.
The law has been warmly welcomed by property professionals in Turkey, many of whom anticipate that there will be an increase in overseas buyer interest because of it.
“Tax exemption for foreigners who buy houses in Turkey is a very wise move,” said Nazmi Durbakayım, head of the Istanbul Constructors’ Association. “This will give a serious boost to the sector.”
It is the second major boost that the government of Turkey has given to the country’s property sector in recent months.
Earlier this year it was announced that Turkey will grant citizenship to foreigners who buy a property costing $1 million – so long as they don’t sell within three years.
The government has been forced to act following a sizable decline in interest from overseas property buyers.
Sales of properties to foreigners dropped by 19 per cent in the first 11 months of 2016 compared to the same period in 2015, according to Turkey’s official statistics agency.
Article published 1st March 2017