VAT Exemption for Foreign Property Buyers in Turkey2026 Guide

The exemption is based on Value Added Tax Law No. 3065. The law applies it to the first supply of buildings constructed as homes or business premises, provided the price is brought into Turkey in foreign currency. The rule remains in force as of October 2026. If the exempt property is disposed of within three years, the VAT not collected must be paid with deferment interest. This article concerns only the property-sale exemption; VAT exemptions for free zones or investment incentive certificates follow different rules.

In practice, the dates often decide the result: when the certificate was obtained, the money paid, the invoice issued and the property delivered. The exemption should therefore be assessed before signing a preliminary sale agreement or sending the first payment.

1.What Are the Conditions for the VAT Exemption on Homes Sold to Foreigners?

The exemption is subject to Article 13/i of the VAT Law and the VAT General Implementation Communiqué. The buyer must not be resident in Turkey, the building must have been constructed as a home or business premises, and its builder must be making the first sale. The price must be brought into Turkey in foreign currency. Under the Communiqué, at least 50% must be brought in and paid before the sale invoice is issued, and the balance within one year. The seller must also receive evidence of the buyer's non-resident status before delivery.

When these conditions are met, the sale is VAT-exempt. The buyer is also expected to retain the property for three years from delivery. Disposal during that period does not retroactively erase the original exemption, but it triggers payment of the VAT not collected together with interest.

2.Which Buyers Qualify for the VAT Exemption?

The exemption covers foreign nationals not resident in Turkey, certain Turkish citizens living abroad, and certain companies established outside Turkey. A foreign national is someone without Turkish citizenship. Blue Card holders who left Turkish citizenship with permission can also fall within this group if they are not resident in Turkey.

Companies must satisfy two conditions together: neither their statutory seat nor their effective place of management may be in Turkey, and they must not earn income in Turkey through a workplace or permanent representative. A company incorporated in Turkey does not qualify merely because all its shareholders are foreign.

3.How Can Turkish Citizens Living Abroad Qualify?

A Turkish citizen who has lived abroad for more than six months under a work or residence permit may qualify. Under the Communiqué, the permit must still be valid on the delivery date and must have been obtained at least six months before that date. The person must also have spent at least six months abroad between obtaining the permit and delivery.

The seller must document these facts before delivery. The buyer provides the work or residence permit, records showing more than six months abroad, and a document from a Turkish embassy or consulate. The consular document establishes that the person does not fall within the excluded group.

The law expressly excludes Turkish citizens living abroad because they work for a public institution or an organisation based in Turkey. An employee sent abroad for the work of a Turkish company therefore does not qualify. Dual nationals who also hold Turkish citizenship are not treated as foreign nationals for this purpose; their eligibility is assessed under the rules in this section.

4.What Does It Mean Not to Be Resident in Turkey?

For a foreign buyer, non-residence means having no domicile in Turkey and not staying there continuously for more than six months in a calendar year. This comes from the residence test in the Income Tax Law. A temporary departure does not interrupt the period of stay.

This corrects a common misunderstanding. Some sources refer to a rolling “six months before the sale”, but the statutory test uses a calendar year and considers domicile separately. People who come for a defined temporary period for work, study, treatment, rest or travel may nevertheless be treated as non-resident even if they remain for more than six months.

Residence is assessed at delivery, not when the preliminary agreement is signed. Entry-exit records should therefore be reviewed before contracting. Agreeing a price on the assumption of exemption can create a substantial later cost if the buyer spends most of the year in Turkey.

5.Can a Foreigner Living in Turkey with a Residence Permit Qualify?

A foreigner living in Turkey under a residence permit and domiciled there normally cannot use this exemption. Its purpose is to encourage people living abroad to bring foreign currency into Turkey to buy property. A person domiciled in Turkey is resident there. The temporary work, study and treatment exceptions address the six-month stay test; they do not automatically override domicile.

Address registration carries weight. In a 2023 tax ruling, the Turkish Revenue Administration treated a foreigner whose registered address was in Istanbul as resident regardless of the length of stay. Because many residence-permit holders also have a registered Turkish address, their position should be assessed before relying on the exemption.

In a 2018 judgment, the Constitutional Court also held that treating residents and non-residents differently for this exemption did not breach equality: their legal circumstances are not the same.

6.Which Properties Are Covered by the VAT Exemption?

The exemption applies to buildings identified as homes or business premises in their construction permits. Flats, shops, offices, residences, serviced apartments and timeshare units may qualify. Sales of bare land and buildings without a construction permit do not.

The building must be ready for use and physically delivered to the buyer. Where a condominium easement can be established, it must also have been established. For units with full condominium ownership already registered, separate proof of physical delivery is not required.

The property's legal character is generally determined from the construction permit and title deed and permit classification. Check those records before signing a preliminary sale agreement. A unit advertised as a “residence” may have a different classification in the permit, affecting both the exemption and the applicable VAT rate.

7.Does the Exemption Apply to a Second-Hand Home?

No. This exemption applies only to the first supply by the taxpayer who built the home or business premises. A flat bought from the developer and resold by another person is not a first supply, however new it may appear. Many second-hand sales between individuals do not attract VAT in the first place, so the exemption question does not arise.

“First supply” is more about who sells than the building's age. According to Revenue Administration rulings, a developer's subsequent sale of a building it had temporarily rented out may still be the first supply. The developer's sale of its own unit in a land-for-construction project may also qualify.

A unit allocated to the landowner and then sold by that landowner is not a first supply. This distinction matters when comparing prices in such projects: two similar units in the same development can have different VAT treatment.

8.How Does the Exemption Work for a Home Bought Before Construction Is Complete?

For an off-plan purchase, eligibility is assessed when the home is delivered, not when the sale agreement is signed. According to the Revenue Administration, delivery occurs when condominium ownership is registered in the buyer's name or, if earlier, when a completed home ready for use is physically handed over. The buyer must satisfy the personal conditions on that date.

This creates a risk in projects that take years to complete. A buyer living abroad when signing may have moved to Turkey by the time of delivery and may no longer meet the non-residence condition.

For delayed projects, the preliminary sale agreement is particularly important. It should state clearly who bears VAT if the conditions are not met on the delivery date.

9.What Does Bringing the Price into Turkey in Foreign Currency Mean?

The purchase price must arrive from abroad in foreign currency, with its route proved by bank or customs records. The Communiqué makes a transfer from an overseas bank to a bank in Turkey the standard route; the bank receipt provides the evidence.

Other routes are possible. For payment using a card issued by a bank abroad, a receipt or letter from the Turkish bank is required. If the buyer physically brings currency into Turkey, a customs document is used; payment to the seller must then be made through a bank and evidenced by a receipt.

Bringing the money in as foreign currency does not mean the seller must receive it in foreign currency: the seller may be paid in Turkish lira. Money already held in Turkey as a lira balance, however, does not satisfy the foreign-currency import condition.

10.Why Must Half the Price Be Paid Before the Invoice?

At least 50% of the price must be brought into Turkey in foreign currency and paid to the seller before the sale invoice is issued. The buyer must bring in and pay the balance in foreign currency within one year. This timetable appears in the Communiqué rather than the statute, but the tax administration applies it.

The parties cannot choose the invoice date without legal constraints. Under the Tax Procedure Law, an invoice is issued no later than seven days after delivery. It can be issued earlier, in which case the taxable event occurs on that earlier date. The formal threshold is the invoice date; because invoices are often issued close to delivery, reaching the 50% threshold before delivery is the safer approach.

Payment by instalments remains possible, but the timetable limits the structure. With a small deposit and early delivery, the threshold may be missed. Plan the payment schedule, delivery and invoice together. Otherwise the exemption may be jeopardised even if the buyer meets every other condition.

11.Does the Exemption Survive Payment by a Relative or Use of a Loan?

Payment sent by someone other than the buyer can qualify if it is documented as relating to this particular sale. By contrast, financing part of the price through a housing loan from a Turkish bank may defeat the exemption. Where a third party pays, the bank receipt should identify the buyer and property, including the project, address and unit number. If it does not, the sender should give the seller a written consent statement containing those details.

The Revenue Administration has also accepted, in principle, a chain in which currency was sent from abroad to a buyer's relative and then paid to the seller in lira. Every transfer must be documented and linked to this home's price. A single overseas transfer covering several buyers requires similar proof of allocation.

The tax administration's position on domestic housing loans is stricter. A loan drawn from a Turkish bank is not currency brought from abroad. In a ruling concerning a sale partly funded by such a loan, it treated the entire home delivery as outside the exemption.

12.When Should the Non-Residence Certificate Be Obtained?

A foreign buyer must obtain evidence that they are not resident in Turkey and give it to the seller before the property is delivered. The certificate is obtained from the tax office where the home or business premises are located. The seller must also receive a copy of the buyer's passport before delivery.

Foreign companies must likewise document their position before delivery. This requires official documents from their home jurisdiction showing incorporation and continuing activity, and a Turkish tax-office certificate confirming that they have no Turkish statutory or business centre or relevant income through a workplace or permanent representative.

The timing of this certificate can be overlooked even when the payment and title-deed timetable is carefully planned. If delivery occurs first, the seller may charge VAT. The buyer may then face a separate, uncertain process to recover it.

13.Can VAT Be Recovered If the Certificate Was Obtained After Delivery?

In one case, the Council of State accepted that VAT could be reclaimed even though the certificate was presented after delivery, where the buyers proved that the statutory conditions were in fact satisfied at delivery. Its Tax Chambers Board affirmed the chamber's decision on 19 March 2025 (E. 2023/624, K. 2025/114). The decision was by majority; it should not be treated as a routine administrative remedy.

Two foreign buyers had jointly bought newly built business premises in Başakşehir, Istanbul. Delivery took place in December 2018 and the seller charged VAT. The buyers supplied their non-residence certificate to the seller in March 2019 and sought a refund. The tax administration refused because the certificate was issued after delivery. The buyers said they had spent only 9 and 14 days in Turkey before title registration.

The court regarded the Communiqué's requirement to obtain the certificate before delivery as lawful. Nonetheless, it accepted that the buyers had proved first supply, foreign-currency payment and non-residence, and annulled the refusal of the refund. Dissenting judges questioned the buyers' standing and whether the correction-and-complaint procedure was available for this dispute.

A late certificate does not automatically destroy the exemption, but it makes proof more difficult. Obtain it before delivery whenever possible.

14.Who Pays If the Exemption Conditions Are Not Met?

If the exemption was applied without the conditions being met, the seller and buyer are jointly and severally liable for the VAT not collected, the tax-loss penalty and late-payment interest. The tax authority may claim the full amount from either party.

The table summarises the principal conditions and what may happen when one is missing.

This table is only a general outline of the exemption.

15.How Does the Seller Declare the VAT Exemption?

The seller reports the exempt sale among full-exemption transactions in its VAT return, in the “Residential or Business Premises Supplies” line. Sale details are also reported on a form attached to the return. VAT incurred by the seller in making the sale may be refundable to the seller if the conditions are met.

That refund indirectly matters to the buyer. Under the Communiqué, evidence that the whole price was brought in and paid to the seller is required for a refund. Incomplete buyer documentation can expose the seller both to loss of the refund and to joint liability.

Developers may therefore be cautious. Some preliminary sale agreements provide for VAT to be collected first and returned if the conditions are later fulfilled. Such a clause should state clearly when and on what terms the amount will be returned.

16.What Happens If an Exempt Property Is Disposed of Within Three Years?

If a home or business premises bought under the exemption is sold or otherwise disposed of within three years, the VAT not collected must be paid with deferment interest. The person disposing of it, namely the original exempt buyer, pays before the new title-deed transaction.

The law links this period to delivery. For a unit with condominium ownership, delivery usually coincides with the title transfer. If a completed unit ready for use was physically handed over earlier, that earlier date can matter. The distinction affects the day on which the three years expire.

Until 1 May 2022 the holding period was one year. Law No. 7394 extended it to three years from that date. Because there is no express transitional rule for earlier deliveries, the period for an older purchase requires separate assessment. As of October 2026, some foreign-language guides still cite the obsolete one-year rule.

The exempt sale is noted in the title-deed register, so payment is expected to be checked at the land registry on a transfer before three years have passed. The separate three-year no-sale undertaking for property-based citizenship comes from a different rule.

17.What Can the Buyer Do If the Developer Does Not Return VAT?

Where a developer has collected VAT despite the exemption conditions being satisfied, the buyer may claim that amount from the developer in the civil courts. The seller is the VAT taxpayer vis-à-vis the tax authority, so the buyer's recovery generally depends on the sale contract. A correction-and-complaint claim against the tax administration may also be considered, as the Council of State case illustrates, but its availability is disputed.

An Istanbul commercial court considered such a dispute in February 2025. A Russian buyer had sent the VAT-inclusive price from abroad in 2022 and obtained the exemption letter from the tax office before invoicing. The developer issued an invoice without VAT but did not return the VAT amount separately shown in the contract. Relying on an expert report, the court found that the exemption conditions were met and ordered repayment. Whether the judgment became final is unknown.

The contract's treatment of VAT is decisive. Under the established approach of the Court of Cassation, VAT is presumed to be included in the agreed price unless stated separately. An expressly itemised, conditional VAT amount provides a stronger basis for repayment. If you have the preliminary sale agreement and invoice, Legal Istanbul can assess which route may be available to recover the amount.

18.How Does the VAT Exemption Affect a Citizenship Application?

The VAT exemption and citizenship through property investment are separate legal schemes; neither automatically establishes eligibility for the other. A home purchased for citizenship can be sold VAT-free if the exemption conditions are also met. Conversely, the exemption alone says nothing conclusive about citizenship eligibility.

Both processes require careful payment evidence. In citizenship applications, the foreign-exchange purchase certificate and bank receipt play a central role. In the commercial-court case above, the developer argued that the VAT-inclusive price came in one transfer and that the exchange certificate could not be split. The court ruled for the buyer on the expert evidence, but the dispute shows how both processes can depend on the same payment records.

Timing matters here too. Citizenship based on an off-plan preliminary sale may be granted before the home is delivered. At delivery, the buyer may then no longer be a foreign national, making the foreign-buyer exemption questionable. If still living abroad, the buyer's position may instead be assessed under the Turkish-citizen conditions. The two timelines should therefore be planned together.

19.Conclusion: Timing Determines the Exemption

The VAT exemption on homes sold to foreigners is a statutory right with defined conditions, but each condition is tied to a date. The buyer's status is tested at delivery, half the payment before invoicing, and the balance within one year. The three-year period determines whether disposal triggers repayment of VAT.

Two otherwise similar purchases can therefore end differently. One buyer takes title without paying VAT; another pays the same tax with interest years later. Often the difference is whether the contract, payment schedule and tax-office certificate were coordinated from the outset.