Resicom – Holiday Investment – 04-21 – LB

Turkey Exempts Overseas Property Investors From VAT

An omnibus law has been passed last week in Turkey to exempt overseas property investors from the 18 per cent value-added tax (VAT) on property purchases.

Passed by parliament on Thursday 23rd February the law means that VAT will not be applied to the purchase by foreigners of their first house or office, provided they make the purchase payment in foreign currency and hold the said property for at least one year after acquisition.

The new law will also apply to Turkish nationals living and working abroad for at least 6 months or more, also exempting them from the VAT charge.

In a further attempt to encourage foreign investment in Turkish property, the government has also pledged to grant citizenship to overseas property investors that purchase properties worth at least $1 million and retain them for a minimum of three years from acquisition. This pledge was made in a revised decree that was published in the Official Gazette on Jan. 12.

Property sales in Turkey were up 12.8 per cent year on year in January when compared to January 2016, according to official data from the Turkish Statistical Institute (TÜİK).

95,389 properties were sold in January, with 35,993 purchased using mortgaged loans, a 35.4 per cent rise from January 2016.

Property sales to foreign nationals were down by 5.2 per cent however, numbering just 1,386 and showing the need for measures to encourage foreign investment in the country.

The most popular city for foreign nationals to purchase property in Turkey was Istanbul with 441 transactions. Antalya on the mediterranean coast came next with 264 sales, followed by Bursa and Ankara with 137 and 72 sales respectively.

With conditions now made more attractive for property investment, it may be time for overseas property investors to take another look at Turkey, which has become a favourite holiday destination for British travelers abroad with its history and sunny climate since the turn of the millennium.

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