In Turkey, real estate is subject to a tax system that ranges from 1% to 18% of the value of the property. The value-added tax is 1% of the property value if you own an apartment with a net size of less than 150 square meters, but if the net area of the property exceeds 150 square meters, the tax rises to 18% of the property value.
The Ministry of Treasury and Finance in Turkey reduced the Value Added Tax from 18% to 8% for properties larger than 150 square meters net area to encourage foreign investors to invest in Turkish real estate, while the percentage of value-add tax remained at 1% for the properties less than 150 square meters net area.
Example 1: if you own a property of 100 square meters and its price is one million Turkish liras, the value of the added tax will be 10 thousand Turkish liras.
Example 2: in the case of owning a property with a net area of 160 square meters and its price is one million Turkish Lira, the VAT will be 80.000 TL or 8% instead of 180.000 TL or 18% from the total value of the property.
When the new housing value-added tax rule is finalized, it will be submitted to President Recep Tayyip Erdogan for final approval.
The new legislation, which is meant to reduce the value-added tax, is likely to have an impact on the revival of Turkey's real estate market and promote demand for new developments.
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