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Real Estate

VAT Exemption (Sales to Foreigners)

VAT exemption under VAT Law 3065 art. 13/1-i on the first delivery of housing/workplace to non-resident foreigners or Turkish citizens living abroad for 6+ months. In effect since 01.04.2017.

The VAT exemption — officially "VAT exemption on deliveries of housing and workplaces" — is the tax exemption under Article 13/1-(i) of Value Added Tax Law 3065, added by Law 6824 art. 7 and effective from 01.04.2017. It remains in force in 2026.

Purpose: Encourage housing/workplace sales to foreigners, increase foreign currency inflows, and support the Turkish Citizenship Law 5901 investor programme (citizenship via USD 400,000 housing investment).

Eligible buyers:

1. Non-resident foreign individuals (per Income Tax Law 193 art. 4) 2. Blue Card holders (Turkish Citizenship Law 5901 art. 28) who are non-resident 3. Turkish citizens living abroad for more than 6 months with a work or residence permit 4. Foreign companies without legal/business headquarters or permanent representative in Türkiye

Mandatory conditions:

- Must be a first delivery — direct sale by the entity that built the property to the buyer. A property bought from the builder and resold does not qualify. - The building permit must designate the unit as housing/office/apart-residence, and it must be delivered ready for use. - A construction-phase title (kat irtifakı) suffices; full condominium title is not required. - Payment must be in foreign currency brought into Türkiye; at least half before the invoice date, the rest within one year. - Title registration must be completed. - A 1-year resale-restriction annotation is placed in the title register's declarations column; selling before that period revokes the exemption and triggers the VAT + tax loss penalty + late interest. Buyer and seller are jointly liable.

Examples

  • 1.A Turkish citizen residing in Germany for 10 years purchases a first-sale apartment in İstanbul from the developer for TRY 5 million → VAT (1% or 18-20%) exempt. If sold within a year, the exemption is revoked and VAT must be paid back.
  • 2.An Emirati investor in Dubai buys a first-delivery housing unit in Antalya for the USD 400,000 equivalent → VAT-exempt and eligible for citizenship application.
  • 3.Company A buys 10 units in bulk from a developer and sells 3 to a Saudi buyer → A's sale is not a "first delivery" and does not qualify for the exemption.

Frequently Asked Questions

How can an overseas Turkish citizen use the exemption?expand_more
They must have lived abroad for **more than 6 months** on a valid work or residence permit. The permit must have been obtained at least 6 months before the delivery date, and continuous residence abroad during that period must be documented. Required documents: residence certificate from the Turkish Consulate in the country of residence, work/residence permit, and 6-month entry/exit records proving absence from Türkiye.
Can the sale price be paid in Turkish lira?expand_more
No. Law requires the **entire price to be brought into Türkiye in foreign currency** (USD, EUR, GBP, etc.) and paid to the seller. At least 50% before invoice date, the remainder within one year. Portions paid in TRY within Türkiye do not count toward the exemption; the seller must charge VAT on those portions.
What if I sell before the 1-year period ends?expand_more
Under the title annotation, a sale before 1 year triggers repayment: **unpaid VAT** plus late interest at the deferral-interest rate under Law 6183 art. 48, paid by the seller **before** the new title transaction. The Land Registry will not complete transfer without a clearance letter from the tax office. After 1 year (exact same date), the property is freely transferable.
Do Blue Card holders qualify?expand_more
Yes. Under Turkish Citizenship Law 5901 art. 28, those who **renounced Turkish citizenship with an exit permit and hold a Blue Card** and are non-resident in Türkiye qualify. Instead of a passport, a copy of the Blue Card is submitted; a non-residency certificate from the tax office is also required.

Related Terms

Title Deed FeeCondominium OwnershipConstruction-Phase Condominium Right

Sources

  • • VAT Law 3065 art. 13/1-(i)
  • • Law 6824 art. 7 (Official Gazette 08.03.2017, effective 01.04.2017)
  • • VAT General Application Communiqué Section II/B-12
  • • Turkish Citizenship Law 5901 art. 28 (Blue Card)

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Last updated: 2026-04-24