Buying a brand-new property in Turkey can come with a meaningful saving for foreign buyers: a full exemption from Value Added Tax (VAT), known locally as KDV. For an international buyer new to the Turkish tax system, the rules can read as a wall of conditions and deadlines. This guide breaks the exemption down from first principles, walks through the process step by step, and frames the documents you will need.
Because Turkish property tax rules change often and several conditions are nuanced, treat this article as orientation, not legal advice. Confirm the current rules and your eligibility with a licensed Turkish tax advisor or lawyer before you commit to a purchase.
What the VAT exemption actually is
VAT is a consumption tax added to the price of many goods and services in Turkey, and a developer selling a newly built property would normally charge it on top of the sale price. Under a specific provision of the Turkish VAT system, that VAT can be waived entirely for qualifying non-resident foreign buyers on the first sale.
The legal basis sources cite for this relief is Article 13/i of Value Added Tax Law No. 3065. In effect, an eligible buyer pays the property price without the VAT component, provided every condition is met and documented.
To put the saving in context, Turkey's standard VAT rate is 20% (raised from 18% in July 2023), with a reduced rate of 10% and a 1% bracket for certain categories. For residential property, net floor area is the main driver: housing up to 150 m2 net is generally taxed at 10%, while the portion above 150 m2 is taxed at 20%. The exact bracket depends on size, location, and assessed value, so verify the rate for a specific property with a licensed tax advisor.
Who can use the exemption
The exemption targets buyers whose money and tax home are outside Turkey. Eligible buyers generally fall into three groups:
- Non-resident foreign individuals who have not resided in Turkey for more than six months in the relevant period.
- Foreign companies that do not have a permanent establishment or earn income in Turkey.
- Turkish citizens who live abroad with a foreign work or residence permit and have been outside Turkey for more than six months.
Just as important is who is excluded. Foreigners who are habitually resident in Turkey or hold a Turkish residence permit, and Turkish citizens who are resident in Turkey or work for Turkish institutions, generally cannot use the exemption. Residency tests are fact-specific, so if your situation sits near the line, confirm your status with a licensed advisor first.
The core conditions at a glance
The table below summarises the 2026 conditions reported by the sources for this guide.
| Condition | Detail |
|---|---|
| Eligible buyer | Non-resident foreign individual or company, or a Turkish citizen living abroad with a work/residence permit (abroad 6+ months); Turkish tax residents excluded |
| Property type | First sale of a brand-new residential or commercial unit bought directly from a VAT-registered developer (resales excluded) |
| Payment | Full price brought into Turkey in foreign currency from abroad via bank channels, documented and paid before or at title transfer |
| Legal basis | Article 13/i of VAT Law No. 3065 |
| Holding period | Minimum 3 years (extended from 1 year by Law No. 7456, effective 15 July 2023) |
| If sold early | Exempted VAT becomes payable with penalty interest; title registry blocks early transfer |
| Paperwork | Exemption certificate from the tax office; developer invoice marked VAT-exempt under Art. 13/i |
| Not covered | The 4% title deed transfer fee (tapu harci) and other purchase costs still apply |
Two conditions catch buyers out most often. First, the property must be a first sale of a brand-new unit bought directly from a VAT-registered developer; resale (second-hand) properties from a private owner do not qualify, no matter how new they look. Second, the full purchase price must be brought into Turkey in foreign currency from abroad through official banking channels, documented, and paid before or at the title deed transfer. The bank receipts are your proof that the funds originated abroad, so keep them safe.
The step-by-step process
Here is the typical sequence from first checks to handover.
- Confirm eligibility. Verify that you are a non-resident foreigner, or a Turkish citizen abroad for 6+ months with a permit, and not a Turkish tax resident. Ideally have an advisor or lawyer review your status.
- Choose a qualifying property: a first-sale, brand-new residential or commercial unit from a VAT-registered developer rather than a resale.
- Gather your documents (see the checklist below).
- Apply for the VAT exemption certificate at the relevant tax office before completing the purchase.
- Transfer the full purchase price into Turkey in foreign currency from abroad through banking channels, and keep the bank receipts as proof of foreign-currency origin.
- Complete the title deed (tapu) transfer. The developer issues a VAT-exempt invoice citing Article 13/i, and you pay the separate 4% title deed transfer fee.
- Hold the property for at least three years to avoid a clawback of the exempted VAT plus interest.
The document checklist
Requirements can vary by tax office, but the sources point to a consistent core set. Treat this as a starting list and confirm the final requirements with your advisor and the developer:
- A passport, usually with a notarized Turkish translation.
- A Turkish tax identification number.
- Proof of non-residency, such as entry/exit records and foreign residence or address documents.
- Developer and property details for the unit.
- Bank receipts proving the foreign-currency transfer into Turkey.
On the official side, the buyer or developer applies to the tax office for the exemption certificate before the sale, and the developer then issues an invoice marked VAT exempt under Article 13/i.
The three-year holding rule and its trap
The condition that surprises buyers most is the holding period. As of 2026 you must keep the property for at least three years. This was extended from the original one-year rule by Law No. 7456, effective 15 July 2023, so older articles that still cite a one-year period are out of date.
If you sell before three years pass, the previously exempted VAT becomes immediately payable together with penalty interest, and the title registry flags the property so it cannot be freely transferred before the period ends. The saving is conditional on holding the asset, not a one-time gift at purchase.
Costs the exemption does not remove
The exemption applies only to VAT; other purchase costs remain. The most notable is the title deed transfer fee (tapu harci), reported at 4% of the declared sale price (not below the municipal assessed value). It is legally split 2% buyer and 2% seller, though this is often negotiated in practice. Budget for it on top of the purchase price.
A note on changing rules
The figures and conditions here reflect the best available 2026 sources, but Turkish property tax rules change frequently and several sub-conditions are not uniformly reported across sources. The residential VAT brackets in particular are complex and depend on net area, location, and assessed value. Before you treat any specific number or condition as final, verify it with a licensed Turkish tax advisor or lawyer and, where relevant, against the Turkish Revenue Administration.