Property VAT Exemption
in Turkey

01 / Legal framework

Property VAT Exemption in Turkey

Certain buyers may purchase a qualifying home or business premises in Turkey without VAT under Article 13/i of the VAT Law. Legal Istanbul reviews the buyer's status, property, payment arrangements and contract before the buyer relies on an exempt price.

The main conditions

Eligible buyer, qualifying first sale and documented foreign-currency funding

Important periods

At least half before the invoice; balance within one year; three-year early-disposal rule

The exemption is not a general benefit for everyone with a foreign passport. Each condition must be supported by evidence. A developer's advertisement, tax number or residence address does not establish the complete claim.

Review should begin before a binding deposit or invoice. The tax treatment affects the agreed price, evidence needed from both parties and responsibility if a condition is not met. These points are harder to resolve after payment.

This service concerns the legal conditions and purchase arrangements. Our real estate purchase service covers the wider transaction. A separate property VAT article provides further background.

02 / Scope of work

Legal Advice Before an Exempt Purchase

We connect the legal requirements with the actual buyer, unit and flow of money. The review identifies confirmed points, missing documents and decisions that need to be made before the next commitment.

The engagement defines the work and fees. Accounting returns, a certified accountant's report, technical inspection, tax litigation and representation on a later resale are not automatically included. Specialist tax input is arranged where the issue requires it.

Advice is based on the records supplied and obtained through authorised channels. The seller's accountant remains responsible for the seller's accounting work. A legal review does not replace the tax authority's decision or guarantee that an exemption will be accepted.

03 / Buyer categories

Who Can Qualify for the Exemption?

Article 13/i provides three main buyer categories. The conditions concern the purchaser named in the transaction, not simply the person financing it or the nationality of a company's shareholders.

Qualifying buyers may purchase more than one eligible property. This is not a once-only allowance for a buyer's first home. Each transaction must meet the property, payment and evidence requirements.

For joint buyers, identify each person's status and share before preparing the documents. One eligible person should not be assumed to make another person's share exempt. A change of buyer or ownership structure requires a fresh assessment.

Source: the Revenue Administration's VAT Communique, II/B-12.1.3.

04 / Individual buyers

Residence Status and Evidence for Individuals

For foreign individuals, being settled in Turkey is assessed under Articles 4 and 5 of the Income Tax Law. The law considers your legal home, called domicile, and the length of your stay. A continuous stay of more than six months in a calendar year can establish residence, subject to statutory exceptions. Temporary departures do not necessarily break the period. Owning a property alone does not settle this question.

The law also contains exceptions for certain temporary purposes and circumstances. A residence permit or a simple count of travel days should therefore not be treated as the whole assessment. Explain your actual living arrangements, visits and reasons for staying.

Before delivery, the seller must obtain the foreign buyer's passport copy and the relevant tax-office document confirming that the buyer is not settled in Turkey. The competent office is the tax office where the property is located. Eligible Blue Card holders have their own identity evidence under the same guidance.

Turkish citizens abroad must meet the separate permission and time-abroad conditions. The work or residence permission must be valid at delivery and obtained at least six months earlier. Time spent abroad after it was issued must also meet the six-month requirement. The seller needs the relevant Turkish embassy or consulate document before delivery. Certain citizens posted abroad for Turkish public bodies or organisations based in Turkey are excluded. A foreign passport held alongside Turkish citizenship does not remove the need to assess the correct category.

05 / Seller and transaction

The First Sale by the Builder

The exemption concerns the qualifying first delivery by the party that built the property. A newly decorated or never-occupied apartment is not necessarily a first delivery for tax purposes. The seller's role and the earlier transactions must be checked.

For example, an intermediary buying a completed apartment from the developer and then selling it to a foreign buyer cannot make the second sale a first delivery. An eligible buyer does not change the earlier transaction history.

A resale that falls outside this exemption is not automatically subject to VAT in every case. Whether VAT applies at all is a separate question about the seller and transaction. Avoid treating every sale as either an exempt developer sale or a taxable sale at one fixed rate.

06 / Property conditions

Building Permission and Readiness for Use

The rules cover buildings constructed as homes or business premises. The permitted description, construction permission and relevant registration must support that use. The guidance includes categories such as apartments, shops and offices; a marketing name alone is not enough.

The building must have construction permission and be physically delivered ready for use. Where project-based unit rights, known as kat irtifaki, can be established, they must be established. For units with completed condominium ownership, known as kat mulkiyeti, the Communique does not require separate proof of physical delivery.

An off-plan reservation is not, by itself, proof of a qualifying completed delivery. If an invoice is proposed before completion, its timing and VAT consequences need specific review. The purchase agreement should not present future eligibility as already confirmed.

Tax eligibility does not establish clear title, safe construction or the absence of debts. These remain separate purchase risks. Our title deed and due diligence service addresses the wider legal records; structural questions require a qualified technical professional.

07 / Foreign-currency funding

Payment Before the Invoice and Within One Year

At least 50% of the purchase price must be brought into Turkey in foreign currency and paid to the seller before the sale invoice is issued. The remaining amount must follow the prescribed foreign-currency route and be paid within one year of the invoice.

A commercial instalment plan lasting longer than a year does not extend the tax deadline. The buyer and seller should agree a workable schedule before issuing the invoice. A reservation receipt and a sale invoice are different documents.

For example, paying a small deposit before the invoice and most of the price afterwards does not meet the initial-half requirement merely because the full price is eventually paid. Do not assume that a later transfer automatically corrects an earlier failure.

Source: VAT Communique, II/B-12.2.1 and 12.4.

08 / Tracing the funds

Bank Transfers and Foreign-Exchange Documents

The normal route is a transfer of foreign currency from abroad to a bank in Turkey, supported by bank evidence. If the money first enters the buyer's Turkish account, the later payment to the seller must also be made through a bank and documented.

The Communique allows the incoming foreign currency to be paid on to the seller in Turkish lira. Keep the records connecting the incoming funds, any conversion and the seller's receipt. An unexplained existing balance in Turkey should not be assumed to meet the funding condition.

Third-party transfers are not automatically excluded. The rules allow specified transfers to the seller's account where the bank record identifies the buyer and property, or the sender provides the required written statement with those details. Review the proposed route before a relative or company sends money.

Foreign-issued credit-card payments require evidence from the relevant Turkish bank that the currency entered Turkey. Currency brought physically requires customs evidence, followed by a bank payment to the seller. A handwritten cash receipt alone is not the required chain of proof.

A foreign-exchange purchase certificate, or DAB, used for title-transfer formalities does not replace the exemption file. Buyer eligibility, the first sale and the required incoming funds must still be established. Payment safety is addressed separately in our property payment guide.

09 / Preparing the file

Documents for a Property VAT Review

The document list depends on the buyer category and the transaction's stage. Identity evidence, a tax-office document and payment records serve different purposes. None should be treated as a substitute for all the others.

For overseas institutions, a certificate of incorporation alone is insufficient. The official guidance also requires evidence of continuing activity and the relevant tax-office confirmation about the institution's centres and Turkish income position.

Foreign documents may need translation and authentication. Agree the required form before arranging them. Send sensitive identity and banking documents through the agreed channel; do not send banking passwords or login codes.

10 / Purchase terms

VAT Clauses and the Agreed Price

The contract should state whether the quoted amount includes VAT, excludes VAT or depends on the exemption being available. A statement that the price is VAT-free leaves important questions unanswered if the transaction later fails a condition.

Identify who supplies each document, when the seller may issue the invoice and how instalments will be recorded. Address the consequences of a refusal, missing evidence or a buyer changing status before delivery. A promise to refund a deposit should have clear conditions and a practical payment mechanism.

A clause making one party responsible for tax does not necessarily prevent the authority from pursuing the other under the law. Contractual recovery rights and liability to the tax authority are different matters.

The applicable VAT rate, where VAT is payable, should be checked for the particular property and transaction. Do not assume every buyer saves the same percentage. Ask for the underlying calculation and distinguish the property's price from professional fees, furnishings and other separate charges.

11 / Coordinating the transaction

From Initial Review to Completion

The sequence should allow the seller to receive the required buyer documents before delivery and the required payments before the invoice. The timing of invoice, physical delivery and title deed transfer needs to be coordinated for the actual transaction.

1. 01

   Review the Buyer

   Identify the category, residence history and supporting records.

2. 02

   Check the Property

   Review the seller, first delivery and building documents.

3. 03

   Agree the Terms

   Align the contract, payment route and invoice timetable.

4. 04

   Complete the File

   Coordinate evidence, delivery and the registry procedure.

5. 05

   Track Later Duties

   Retain the records and follow remaining payments and resale conditions.

The seller reports the exempt sale through its VAT filing process and informs the land registry of the Article 13/i treatment. The required registry procedure is part of applying the exemption, not merely an optional note for the buyer.

No fixed approval period can be promised before the file is reviewed. Missing residence evidence, an unclear first-sale history or incomplete bank records may require further enquiries. The engagement should identify who will follow each outstanding matter.

12 / Duties after purchase

Selling Within Three Years

Under the current rule, disposal of an exempt property within three years requires payment of the previously exempt VAT with the statutory interest calculated under Article 48 of Law No. 6183. Payment must be made before the title deed transfer.

The disposing owner pays the relevant tax office where the property is located. The registry requires the tax-office letter confirming payment and that the transfer may proceed. Check the original transaction date, invoice and registry record before agreeing an unconditional resale date.

This is not an absolute ban on an early sale. It is a tax consequence and a required procedure. The amount and applicable interest should be confirmed for the specific file rather than estimated from an old online percentage.

The three-year rule is different from the one-year deadline for paying the purchase-price balance. Older guidance referring to a one-year holding period should not be used for a new purchase. Once the applicable three-year period is complete, this early-disposal VAT repayment is not required; other taxes on a later transaction remain separate.

Source: VAT Communique, II/B-12.3, including the change effective from 1 May 2022.

13 / Incorrect exemption claims

Missing Conditions and Tax Liability

If an exemption is used without meeting the statutory conditions, the buyer and seller may be jointly liable for the unpaid VAT, tax-loss penalty and late-payment interest. Missing the required foreign-currency payment stages can produce this result.

This is different from a qualifying purchase followed by an early disposal under the three-year rule. The reason the tax becomes payable matters. A file should not treat every problem as an early-sale calculation or assume that no penalty can arise.

If the seller or authority questions the exemption, preserve the invoice, contract, official correspondence and bank records. Establish the exact objection and which evidence is missing. Correcting a document may be possible in some cases, but it cannot be promised to create a condition that was never met.

A formal assessment or penalty requires prompt review of the document, notification date and available response. Advice on an original purchase does not automatically include a later tax challenge. Any representation and deadline responsibility must be expressly agreed.

14 / Separate legal questions

Other Costs and Citizenship Plans

This exemption concerns VAT on the qualifying property delivery. It does not remove title-transfer charges, applicable ownership taxes, translation expenses, bank charges or professional fees. A purchase budget should show these separately rather than describe the transaction as entirely tax-free.

VAT exemption and citizenship by investment are separate legal questions. The buyer's status and proposed timing must be checked for both. An exempt invoice does not confirm that a property or payment meets citizenship requirements, and citizenship approval is not promised by the seller's tax treatment.

If both regimes apply, their records and continuing conditions must be tracked separately. A citizenship-related restriction cannot be ignored merely because an early VAT repayment has been made. See our citizenship by investment service for that review.

Our fees depend on the agreed work, document volume and stage of the matter. A focused contract and eligibility review may differ from representation through completion or a disputed tax assessment. The scope and payment terms are agreed before work begins.

15 / After an invoice or payment

If VAT Has Already Been Charged

Do not assume that a completed purchase can simply be relabelled as exempt. Review the conditions as they stood at the relevant dates, including the first-delivery position, buyer status and timing of the funds. Later eligibility does not automatically change an earlier transaction.

The first step is to identify what was actually charged and paid. Compare the contract, seller's invoice, payment receipts and tax treatment. A reservation document showing an estimated VAT amount is not the same as a final invoice and completed payment.

Any available correction or recovery process depends on the evidence and the applicable procedure. It may involve the seller's accounting records and cooperation. There is no automatic cash refund to every foreign buyer who later requests exemption.

The seller's right to seek a refund of qualifying input VAT is also a separate matter. Under the Communique, that refund follows full receipt and payment of the price under the required conditions. It should not be confused with a guaranteed repayment of money to the buyer.

16 / Common questions

Questions About Property VAT Exemption