VAT Exemption in Housing or Workplace Sales to Foreigners 2026

Investments in residential and commercial properties by foreigners in Turkey have increased significantly in recent years. One of the regulations encouraging foreigners to acquire real estate in Turkey is the VAT exemption on housing sales to foreigners application.

pursuant to Article 13/i of the Value Added Tax Law No. 3065, it is possible not to calculate VAT on the initial delivery of residences or workplaces constructed in Türkiye, provided that certain conditions are met. However, this application does not automatically apply to every foreigner purchasing real estate in Türkiye. Various conditions must be met collectively, such as whether the buyer is a resident in Türkiye, whether the real estate qualifies as an initial delivery, the importation of the sales proceeds into Türkiye in foreign currency, and the issuance of the required documents.

Therefore VAT-exempt real estate sales to foreigners, is a legal and tax process that must be conducted carefully for both the buyer and the seller.

In this article VAT exemption in real estate sales to foreigners 2026, details who can benefit from the exemption within the scope of Article 13/i of the VAT Law, which properties are covered, the bringing of foreign currency into Türkiye, the required documents, and the provisions to be applied in the event of subsequent sale of the real estate.

A foreigner benefiting from the VAT exemption when purchasing a residence and obtaining a residence permit based on the real estate are distinct legal processes. Regarding the requirement of a 200,000 USD minimum value in a single property and other conditions for the residence permit to be granted based on the property, our property residence permit guide you may review.

What is the VAT Exemption in Housing Sales to Foreigners?

VAT exemption in real estate sales to foreigners, is a tax exemption that ensures VAT is not applied to the initial delivery of residences or workplaces constructed in Türkiye, granted to foreign real persons meeting certain conditions as well as other persons and entities specified in the law.

The primary legal basis of the regulation Article 13/i of the Value Added Tax Law No. 3065. Accordingly, the initial delivery of buildings constructed as residences or workplaces is exempt from VAT, provided that the consideration is brought to Turkey in foreign currency and the sales are made to specified purchasers.

The referenced source also states that Article 13/i of the VAT Law was introduced to take effect as of April 1, 2017, and that its primary purpose is to increase the inflow of foreign currency into Turkey.

Therefore, the purpose of the practice is not solely to enable foreigners to acquire housing at a lower cost. At the same time, bringing foreign currency into Turkey and supporting the construction sector are targeted.

Can a Foreigner Buy a House in Turkey Without Paying VAT?

Yes. However, not every foreigner can purchase housing in Turkey without paying VAT.

To benefit from the VAT exemption, all conditions set forth in the law and the VAT General Implementation Communiqué must be fulfilled.

In particular;

• The buyer must be a foreign national natural person not resident in Turkey,
• The acquired real estate must be a residence or workplace falling within the scope of the exemption,
• The delivery of the real estate must be the initial delivery,
• The sales price being brought into Turkey in foreign currency in accordance with the required conditions,
• The foreign currency transfer and other conditions being proven with documents

.

In terms of the application of the VAT exemption, it is important for the seller to also verify that the buyer meets the exemption conditions and submits the necessary documents.

Who Can Benefit from the VAT Exemption under Article 13/i of the VAT Law?

There are three main groups of buyers under Article 13/i of the VAT Law.

1. Foreign National Individuals Not Resident in Turkey

Foreign national individuals who are not resident in Turkey may benefit from the VAT exemption, provided that they also meet the other required conditions.

What is important here is not merely the person's foreign nationality. The condition of not being resident in Turkey must also be satisfied.

Therefore, a foreign person's citizenship alone is not sufficient for the VAT exemption.

2. Turkish Citizens Living Abroad for More Than Six Months

Certain Turkish citizens who live abroad for more than six months by obtaining a work or residence permit may also benefit from the exemption.

However, due to the exceptions specified in the law, Turkish citizens who are abroad affiliated with certain public institutions or organizations centered in Turkey are not evaluated within this scope.

The General Communiqué on VAT also clarifies that Turkish citizens residing abroad for more than six months with a work or residence permit may benefit from the exemption under certain conditions.

3. Foreign Institutions Without a Workplace or Permanent Representative in Turkey

Deliveries of residences or workplaces made to institutions that do not have their legal and business headquarters in Turkey and do not generate income in Turkey through a workplace or permanent representative may also fall within the scope of the exemption, provided that the conditions are met.

Which Immovables Fall Within the Scope of VAT Exemption?

Under Article 13/i of the VAT Law, only immovable properties of a specific nature may benefit from the exemption.

According to the General Communiqué on VAT, the scope of the exemption includes buildings constructed as residences or workplaces .

In order for the immovable property to be evaluated within the scope of the exemption, generally;

• Having a construction permit,
• Having been constructed as a residence or workplace,
• Being actually delivered in a condition ready for the buyer's use,
• Floor servitude (kat irtifakı) having been established for immovable properties where floor servitude can be established

conditions such as these must be evaluated.

In the construction permit, immovable properties defined with characteristics such as residence, shop, office, bureau, residence-hotel, apart-apartment, or timeshare can be evaluated within the scope of the regulation.

It is stated that in the delivery of residences or workplaces where condominium ownership has been established, the verification of actual delivery is not additionally required.

Is There a VAT Exemption in the Sale of Second-Hand Residences to Foreigners?

Not every residential sale made to foreigners within the scope of Article 13/i of the VAT Law is exempt from VAT.

One of the most important conditions is that the immovable property is within the scope of the first delivery .

According to the General Communique on VAT Application, the exemption applies to the first delivery to be made by the taxpayer who constructs the residence or workplace. If a residence purchased from the constructing person or company is subsequently sold to another person, the second sale is not considered the first delivery.

Therefore, a separate evaluation must be made regarding foreigners who wish to purchase second-hand residences.

For instance, if a construction company sells a newly completed apartment to a foreign individual who is not resident in Turkey and other conditions are met, the Article 13/i exemption may come into question.

Conversely, the subsequent sale of the same apartment by the foreign national to another person does not constitute a new initial delivery.

Can VAT Exemption Be Applied to Residences Under Construction?

In certain cases, the VAT exemption may also apply to residences or commercial properties that are the subject of sales at the project stage.

However, the crucial point here is that the necessary conditions for the exemption are met at the stage when the immovable property is legally and physically delivered.

In a private ruling issued by the GİB, it was explained that for residences or commercial properties sold at the project stage, at least 50 percent of the consideration must be brought to Turkey in foreign currency and paid to the seller before the issuance of the invoice, and the remaining portion must be brought to Turkey and paid within one year at the latest from the invoice date.

Therefore, at the project stage, for foreigners wishing to purchase VAT-exempt residences, it is of great importance that the payment plan and foreign currency transfers are structured correctly from the outset.

How Must Foreign Currency Be Brought to Turkey for the VAT Exemption?

One of the most important conditions for the VAT exemption in property sales to foreigners is that the sales consideration is brought to Turkey in foreign currency.

The General Communiqué on VAT Implementation stipulates that the sales price must be:

at least 50% prior to the date the invoice is issued, and the remaining portion within one year at the latest from the invoice date brought to Turkey in foreign currency and paid to the seller.

Therefore, while preparing the payment plan for a foreign buyer, the payment conditions of the VAT exemption must certainly be taken into consideration.

Can Foreign Currency Be Brought to Turkey via Bank?

Yes.

Transferring foreign currency located abroad to a bank in Turkey is one of the primary methods.

Bank receipts demonstrating that the transfer has been made are crucial for proving the conditions of the exemption.

According to the statements of the GİB, in addition to transfers made from abroad to a bank in Turkey, payments made using credit cards issued by foreign banks under certain conditions can also be documented. If the foreign currency is physically brought to Turkey, documents obtained from the customs administration may be used.

Is the Foreign Exchange Purchase Document Required for VAT Exemption?

It is extremely important that the bringing of foreign currency into Turkey and the related transactions are duly documented during the acquisition of a residence or workplace by a foreigner in Turkey.

Particularly when foreigners purchase real estate in Turkey, foreign currency transfers, banking transactions, and title deed (tapu) procedures must be consistent with one another.

Bank receipts and other documents prescribed by the legislation can be used to prove that the sales price has been brought to Turkey. Among the VAT refund documents of the GİB, for transactions within the scope of Article 13/i, bank receipts or customs documents certifying that the entire foreign currency has been brought to Turkey are considered.

Therefore, simply having the money transferred to Turkey may not be sufficient; it is important that it can be demonstrated, when necessary, which immovable property the payment relates to.

Can Foreigners Pay the Residence Price in Turkish Lira (TL)?

The fundamental condition regarding the VAT exemption is that the consideration is brought to Turkey in foreign currency.

However, after the foreign currency is brought to Turkey and properly documented, it is permissible to make the payment to the seller in Turkish Lira.

In the statements of the GİB, it is specified that the consideration brought from abroad as foreign currency can be paid to the seller in Turkish Lira through a bank.

Therefore, evaluating the foreign buyer's payment method solely as a "TL payment" is incorrect. What is essential is that the foreign currency inflow required by the exemption and its documentation are carried out in due form.

What Are the Required Documents for VAT Exemption?

While applying the VAT exemption in housing sales to foreigners, the necessary documents must be prepared prior to the transaction.

Although subject to change depending on the specific case, particularly;

• Buyer's identity and passport documents,
• Documents showing that the buyer is not a resident in Turkey,
• Documents showing that the buyer is within the scope of the exemption,
• Construction permit for the immovable property,
• Documents regarding floor servitude (kat irtifakı) or condominium ownership (kat mülkiyeti),
• Sales invoice,
• Bank receipts regarding the foreign currency transfer,
• Other documents showing that the foreign currency has been brought into Türkiye,
• Documents to be obtained from the tax office when necessary

is of importance.

Regarding VAT refund, the documents published by GİB also specify documents such as the list of sales invoices for transactions within the scope of Article 13/i, documents regarding the period in which the exemption was declared, the list of incurred VAT, and bank or customs documents showing that the entire foreign currency has been brought into Türkiye.

What Is the Seller's Liability Regarding VAT Exemption?

The seller's liability in the VAT exemption is of utmost importance.

Because for the exemption to be applied, it is not sufficient for the buyer to be merely 'foreign'. The seller must verify that the buyer meets the exemption conditions and that the required documents are available.

The referenced source also states that the seller has a significant responsibility in terms of determining whether the buyer who will benefit from the exemption meets the conditions and obtaining the documents certifying this situation.

If the VAT exemption is applied even though the conditions are not met, joint and several liability (müteselsil sorumluluk) of the buyer and the seller may arise regarding the uncollected tax, tax loss penalty, and late payment interest.

Therefore VAT-free residential property sales to foreigners it is important to review the legal and tax documents before execution.

When Can a Residence Acquired with VAT Exemption Be Sold?

There is an important update here.

Value Added Tax Law (KDV Kanunu)while the regulation under Article 13/i initially stipulated a one-year period, pursuant to the Communiqué Amending the General Implementation Communiqué on Value Added Tax (Serial No. 42) dated May 28, 2022, this period has been extended to three years.

The current 2026 General Implementation Communiqué on Value Added Tax also stipulates that if the real estate acquired within the scope of the exemption is disposed of within three years consequences regarding the tax not collected in a timely manner shall arise.

Therefore, in the event that a residence or workplace acquired by utilizing the VAT exemption is sold before the expiration of the three-year period, the VAT not collected due to the exemption and the related financial liabilities may become applicable.

This issue is among the primary matters that foreign nationals purchasing real estate from Turkey for investment purposes must pay attention to.

What Happens If Real Estate Acquired Through VAT Exemption Is Sold Within Three Years?

In the event that the immovable property is disposed of within the three-year period, the tax not collected in a timely manner, within the scope of the relevant regulations, Law No. 6183along with the deferral interest calculated pursuant to Article 48 of payment comes into question.

A foreigner purchasing residential property in Turkey may also be evaluated in terms of residence permit, independently of tax conditions. For conditions regarding the acquisition date, value, and actual use of the property, our residence permit through property ownership guide you may review.

The current VAT General Application Communiqué contains additional regulations regarding the calculation of the three-year period and transfer transactions after the expiration of the three-year period. It is stated that tax and deferral interest will not be required for transfers to be made after the expiration of the three-year period.

Therefore, foreign investors benefiting from the VAT exemption must check the period and the tax consequences that may arise within the scope of the exemption before selling the real estate.

What Happens If VAT Exemption Is Not Applied Properly?

The application of the VAT exemption without fulfilling its conditions may entail significant financial consequences.

In the event that it is subsequently determined that the conditions stipulated in the law are not met;

• VAT not collected in a timely manner,
• Tax loss penalty,
• Default interest

may come up.

Additionally, joint and several liability of the buyer and the seller may apply. This matter is also explicitly regulated in the current VAT General Application Communiqué.

Therefore, especially in high-value real estate sales, the VAT exemption should be evaluated not only at the time of sale, legal and tax due diligence prior to the sale is important.

VAT Exemption on Commercial Real Estate Sales to Foreigners

Article 13/i of the VAT Law does not solely cover residential property sales.

Provided that the conditions are met the VAT exemption for the sale of commercial real estate to foreigners may also apply.

Offices, workspaces, shops, and other immovable properties possessing the character of commercial real estate as specified in the legislation may be evaluated within the scope of the exemption, provided they meet the necessary conditions.

In particular, foreigners wishing to make commercial investments in Turkey must additionally evaluate the conditions for the VAT exemption when purchasing a workplace, office, or independent commercial unit.

Why is Lawyer Assistance Important for Foreigners Purchasing Real Estate in Turkey?

The acquisition of real estate in Turkey by foreigners is not limited solely to the transfer of title deeds.

The examination of the legal status of the immovable property, verification of the seller's authority, inspection of title records, drafting of the sales contract, determination of the payment method, documentation of foreign currency transfers, and evaluation of the VAT exemption conditions must be handled comprehensively.

Particularly, For foreign buyers wishing to benefit from the VAT exemption, proper planning from the very beginning of the sales transactionis crucial to prevent facing retroactive VAT, penalty, and interest liabilities.

When a foreigner purchases real estate in Turkey, looking solely at the price of the property is not sufficient. VAT, title deed fee, foreign currency transfer, citizenship requirements, and the legal status of the property should be evaluated together.

Frequently Asked Questions About VAT Exemption in Housing Sales to Foreigners

Do foreigners not pay VAT when buying a house in Turkey?

There is no general rule stating that every foreigner is exempt from VAT. If all the conditions specified within the scope of Article 13/i of the VAT Law are met, a VAT exemption may be applied to the first delivery of a residence or workplace.

Can a foreigner benefit from the VAT exemption when purchasing second-hand housing?

The Article 13/i exemption is fundamentally applied to the first delivery made by the taxpayer who constructs the residence or workplace. Therefore, second-hand real estate sales are, as a rule, not within the scope of this exemption.

Is there a VAT exemption on the sale of workplaces to foreigners?

Yes. Provided that the other conditions in the law are met, a VAT exemption may also be applied to workplace deliveries made to foreign real persons or foreign entities that meet the requirements.

Must the entire foreign currency be brought into Turkey for the VAT exemption?

Within the scope of the payment conditions for the VAT exemption, it is stipulated that at least 50% of the consideration must be brought into Turkey as foreign currency before the invoice date, and the remaining portion must be brought into Turkey and paid to the seller within one year at the latest.

Can a house purchased with a VAT exemption be sold within three years?

It can be sold; however, if it is disposed of before the expiration of the three-year period, taxes and related financial liabilities that were not collected in a timely manner may become applicable. Under current regulations, the period is applied as three years.

Can more than one residential property be purchased under the VAT exemption?

The General Communiqué on VAT states that buyers who meet the conditions can purchase more than one residential or commercial property within the scope of the exemption.

Is it important for the foreigner not to be a resident in Turkey for the VAT exemption?

Yes. Foreign national individuals who are not resident in Turkey constitute one of the buyer groups specified in the law. Therefore, the residency status of the foreigner in Turkey must be evaluated separately.

Conclusion: Conditions Must Be Checked Individually in VAT-Exempt Property Sales to Foreigners

VAT exemption in real estate sales to foreigners, is a significant tax advantage for foreigners wishing to make real estate investments in Turkey. However, merely being of foreign nationality is not sufficient to benefit from this advantage.

It is required that the immovable property falls within the scope of the exemption, the sale qualifies as a first delivery, the buyer is among the persons specified in the law, the sales proceeds are brought into Turkey as foreign currency in compliance with the legislation, and the necessary documents are issued.

Additionally, the immovable property acquired through the VAT exemption the potential tax consequences that may arise in the event of disposal within three years must also be taken into consideration. The current legislation is based on the three-year period.

Therefore, before foreigners purchase residential or commercial property from Turkey, whether the VAT exemption can be applied, the first delivery nature of the immovable property, how payments and foreign currency transfers will be made, and the required documents it is important to have them reviewed from a legal and tax perspective.

Receiving support from an expert lawyer for legal consultancy on the sale of real estate to foreigners, VAT exemption, and acquisition of immovable property in Türkiye helps mitigate future tax and dispute risks for both the buyer and the seller.

Atty. Batın YILMAZ