Turkish parliament passes law eliminating VAT for foreign property buyers

Turkey's parliament has approved an omnibus law which introduced an exemption of 18 percent of value-added tax (VAT) for foreigners who invest in real estate in Turkey. 

The law, which was passed by parliament late on Feb. 23, will also be applicable to Turks who live and work abroad for more than six months. 

Foreigners will not pay VAT for their first offices or houses in Turkey on the condition that they make their acquisition payment in foreign currency and do not sell their properties for at least one year after the acquisition. 

Turkey also vowed to grant citizenship to foreigners who buy properties worth at least $1 million and keep them for at least three years, according to a revised decree that was published in the Official Gazette on Jan. 12.

Meanwhile, property sales in Turkey surged 12.8 percent in the first month of 2017 from a year earlier, official data from the Turkish Statistical Institute (TÜİK) revealed on Feb. 24.        

Some 95,389 houses were sold, according to the data. Purchases made via mortgaged loans were 35,993 in the month, up 35.4 percent from the same month of the previous year.      

The number of properties sold to foreigners in the month was, however, 1,386, down 5.2 percent compared to the same month of last year.

In cities where foreigners most heavily invested in real estate, Istanbul was the leading province with 441 sales in January.

Istanbul was followed by the Mediterranean province of Antalya with 264 sales, Bursa with 137 and Ankara with 72.

Iraqi citizens bought 279 properties in Turkey in January, followed by Saudis at 144 units, Kuwaitis at 115 units, Afghans at 107 units and Russians at 60 units.