Updated: 27 October 2025
Foreign investors purchasing property in Turkey can benefit from a significant tax advantage — the VAT exemption (KDV istisnası) under Article 13/i of the Turkish Value Added Tax Law No. 3065. This exemption allows eligible buyers to save up to 18% of the purchase price when buying newly built properties.
Legal Basis – Article 13/i of the VAT Law
Article 13/i of Law No. 3065 provides that the delivery of residential and commercial real estate to persons who are not residing in Turkey and who pay the consideration in foreign currency is exempt from VAT. This regulation was introduced in 2017 to encourage foreign investment and has been clarified through subsequent communiqués issued by the Ministry of Treasury and Finance.
Who Can Benefit from the VAT Exemption
Eligible individuals: Foreign nationals who have not resided in Turkey for the last six months before the purchase date and make payment in foreign currency transferred from abroad.
Eligible companies: Foreign entities without a permanent establishment in Turkey that purchase real estate for investment or business purposes.
Not eligible: Turkish citizens residing in Turkey or foreign nationals holding Turkish tax residency for more than six months.
Which Properties Qualify
Only newly constructed residential or commercial units sold for the first time by the developer or construction company qualify for the exemption. Second-hand (resale) properties are not eligible. The purchase amount must be paid before the transfer of title and documented through a Turkish bank in foreign currency.
Step-by-Step Application Process
- Obtain a Turkish Tax Number: Required for title deed and banking transactions.
- Transfer the Purchase Amount in Foreign Currency: Payment must be made from abroad through the banking system.
- Prepare Contract and Invoice: The developer issues an invoice stating “VAT Exempt under Article 13/i of Law No. 3065.”
- Title Deed Transfer (Tapu): Submit the sales contract, invoice, and proof of payment.
- Retention Period: The buyer cannot sell the property for one year. If sold earlier, the previously exempt VAT becomes payable.
Required Documents
- Passport and notarized Turkish translation
- Tax number certificate
- Proof of non-residency (entry-exit record or certificate)
- Bank receipt showing transfer from abroad in foreign currency
- Sales contract and VAT-exempt invoice
Common Mistakes and Practical Tips
- Payments made in Turkish Lira from local accounts void the exemption.
- Purchases from private sellers (resale) are not eligible.
- Foreign funds must arrive before signing the sales contract.
- Working with a real estate lawyer ensures compliance with all procedural requirements.
Timeline and Estimated Process
| Step | Estimated Time | Note |
|---|---|---|
| Tax number & bank setup | 1 day | Can be completed remotely via Power of Attorney |
| Property selection & due diligence | 2–5 days | Legal review recommended |
| Payment & title transfer | 3–7 days | Foreign currency must be used |
| Total duration | Approximately 2 weeks | Varies by location and tapu workload |
Example Case Study
Mr. A, a British national, purchased a new apartment in Istanbul for USD 250,000. The payment was transferred directly from his UK bank account. The developer issued a VAT-exempt invoice referencing Article 13/i of Law No. 3065. As a result, Mr. A saved approximately USD 45,000 — an 18% tax reduction achieved through proper legal compliance.
Recent Legal Updates (as of October 2025)
- Authorities now require stricter proof of foreign currency inflow and invoice matching.
- Developers must declare VAT exemptions electronically via the Revenue Administration system (GİB).
- Bank receipts for both buyer and seller must be traceable and officially recorded.
Conclusion
The VAT exemption under Article 13/i offers one of the most advantageous incentives for foreign investors entering the Turkish real estate market. Proper compliance with legal and financial procedures is essential to secure this benefit safely. Our law office provides end-to-end assistance, from eligibility review to title transfer, ensuring full compliance with Turkish regulations.
Contact us for a personalized assessment:
WhatsApp Consultation |
Telegram Channel
This article is for informational purposes only and does not constitute legal advice. Legal requirements and government practices may change without notice.
Frequently Asked Questions
Can Turkish citizens benefit from this exemption?
Only if they live abroad and have not resided in Turkey for the past six months before purchase.
Can the exemption be claimed after purchase?
No. The exemption must be arranged before the title transfer and indicated on the developer’s invoice.
Does the exemption cover land purchases?
No. It only applies to residential or commercial units such as apartments, offices, or shops.
What happens if I sell within one year?
The exempted VAT becomes immediately payable, along with statutory interest.
Can this exemption apply to Citizenship by Investment properties?
Yes. Properties purchased under the citizenship program can also qualify if all conditions are met.
Official Sources
- Law No. 3065 on VAT – The foundational legislation for the exemption.
- Turkish Revenue Administration (GİB) – Guidance on VAT procedures.
- Official Gazette (Resmî Gazete) – Updates on communiqués and legal amendments.
- Tapu and Cadastre General Directorate (TKGM) – For title deed transactions.
- e-Devlet Portal – Access official records and documents online.
