Conditions for exemption from real estate tax

Investing in Turkey has become a unique opportunity for all investors and entrepreneurs, especially after the many facilities provided by the Turkish government to investors, including exemption from real estate tax for the purpose of stimulating the purchase of apartments for sale in Turkey without imposing restrictions that prevent them from doing so, as ax exemption makes it easier to pay some of the fees and taxes and imposed on real estate in Turkey, which enhances investment movement in the country, especially after reducing the burden of taxes, but this exemption is subject to conditions, so we advise you to follow us until the end to find out the conditions for tax exemption in Turkey.

The concept of real estate taxes in Turkey

Turkey imposes on real estate owners on its land to pay a real estate tax that is determined according to the real estate property tax law in Turkey and is paid by the property owner, the person who benefits from the property, or whoever has the right to dispose of the property. When the owner submits a request to the relevant authorities regarding tax exemption, he must avoid any Error to access to benefit from the real estate tax exemption law.

Also, in the event of a tax exemption for part of the taxes, the remaining part must be paid at the specified times, otherwise you will be required to pay a fine estimated at 1.40%, and this percentage increases the longer the delay in paying the tax.

Taxes imposed on Turkish real estate

The Turkish government requires real estate owners to pay taxes annually by a specific date determined by the government agencies designated for real estate taxes. Real estate taxes vary as follows:

One-time real estate tax: This is called the taboo tax or property registration tax, and its value is 4% of the price of the property registered with a title deed. This tax is paid in half between the seller and the buyer.

Annual tax: This is a tax paid to the property on an annual basis and its value in major cities is 2% of the value of the property. However, if the property is located outside the cities, the annual tax is estimated at 1% of the value of the property.

Disaster insurance tax: This tax is paid annually, and this tax is determined according to several criteria such as the area of ​​the property, its age, etc., as this tax is paid to companies approved by the Turkish government.

Value-added tax: This tax was paid once upon purchasing the property in Turkey and its value ranges from 1% to 8% and may sometimes reach 18% and the value of this tax can be determined according to the type of property, its location and area, and the percentage of this tax is calculated and from the net area of ​​the property, not from its total area, as for the exemption from the added real estate tax in Turkey, it includes foreign investors, foreign companies, and Turkish companies, provided that all of these parties are not residents of Turkey.

Tax exemption on Turkish real estate

Exemption from real estate tax in Turkey includes value-added tax, which is paid when purchasing a property, as the value of the tax on investment apartments in Turkey is about 18%, whether shops or administrative offices, and at a rate of 1-8-18% for residential properties.

Real estate tax is exempted in the case of value-added tax only, without exemption from ownership transfer costs, service fees, annual taxes, monthly subscriptions, etc.

Types of real estate covered by tax exemption in Türkiye

The Turkish government has specified the properties that are included in the exemption from tax value, and these properties are newly built, whether they are residential properties such as apartments and villas, commercial properties, administrative offices, etc, as for previously built properties and agricultural lands, they are not included under the types of properties exempt from tax.

Categories receiving exemption from real estate tax

Many categories are exempt from value added, including the following:

Foreigners who are not residents of Turkey

Foreign companies that do not have a headquarters in Turkey

Turks who are not residents of Turkey

Those who own a single residential property whose area does not exceed 200 square meters and do not have any other residence or any share in another residence.

There are special social groups who have been granted exemption from real estate tax even if they own a home less than 200 square meters, but on the condition that they own only one home and these categories are retirees, martyrs, their relatives, orphans, the disabled, widows, and housewives.

Conditions for exemption from real estate tax

As for the conditions for exemption from real estate tax, foreign investors must apply to the real estate tax authorities to request tax exemption, but only after meeting the following conditions:

The foreign investor must be a non-resident of Turkey

There is no headquarters for foreign companies in Turkey

Not residing in Turkey for a period exceeding 6 months in the previous year

Lack of a valid residence permit starting from the previous year

Lack of registered residence address in Turkey

Tax exemption includes value-added tax only for new properties, not old-constructed properties

Residential properties include tax-exempt villas and apartments, as well as newly built offices and shops

Agricultural land does not fall under real estate that is exempt from value-added tax

Bank transfers must be available from sources outside Turkey's borders proving payment of the property value

Or the presence of a customs declaration document noting that payment for the value of the property must be in foreign currency

The tax-exempt property must not be sold within one year

If these conditions are met, the investor must prepare the following documents:

An exact copy of the passport, provided that it is translated

Turkish tax number

Real estate sale contract

An official power of attorney for the lawyer in charge of following up on submitting the application

Ways to obtain a tax exemption certificate

Anyone who wants to obtain an exemption from the real estate tax must go to the registry department of the property that was purchased in Turkey and apply for an exemption from the real estate tax. When they prove the tax exemption, they can recover the money that was paid in taxes during the 5 years prior to the date of submitting the tax exemption.

Several documents must also be attached to the application that is submitted, including a bank receipt proving the transfer of funds from outside Turkish banks, or the presence of a paper proving the entry of the amount through the Turkish airport, and the amounts transferred will be in US dollars.

Also, a document proving the owner’s residence outside Turkey must be available, with that document bearing an officially documented address for the property owner outside Turkey, attaching a paper from the Immigration Department proving non-residence in Turkey for a period of 6 months, and a document revealing the movement of entry and exit from Turkey from the Public Security Directorate.

Questions about exemption from real estate taxes in Turkey

What happens if the property tax-exempt is sold within a year?

If the residential property, commercial shop, or administrative office is sold within a year, the uncollected tax will be paid with late interest and is calculated according to the deferred interest rate in Article 48 of Law No. 6183 to the tax office affiliated with the location of the property.

How is VAT refunded after purchasing a property?

The value-added tax is refunded after providing proof of the entry price of the property into Turkey and paying it to the seller.

What are the papers needed to request account recovery?

The necessary papers for this are a refund request, a value-added tax list, a list of sales invoices, and bank receipts from outside Turkish banks proving that the full value has been paid to the seller.

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