Can VAT Be Refunded When Buying Property?

Is VAT Refundable When Buying Property in Turkey?

One of the most frequent questions asked by foreign buyers: is it possible to get a VAT refund when buying property in Turkey? The short answer is yes, but with an important caveat: legally speaking, it's more accurate to talk not about a "refund", but about an exemption from paying VAT (KDV). Since April 2017, Turkey has had a law allowing foreigners and citizens residing abroad to not pay value-added tax at all when purchasing residential property on the primary market. The savings can amount to tens of thousands of dollars — let's see who and how can benefit from this exemption.

What is VAT (KDV) When Buying Property?

VAT — in Turkish Katma Değer Vergisi (KDV) — is a tax that applies to the purchase of new property from a developer. In secondary market transactions (between individuals), VAT does not apply — this is a key point to remember right away.

The tax is included in the price of the property and is paid by the buyer by default. However, if certain conditions are met, it can be completely exempted.

Current VAT Rates on Property in Turkey

The KDV amount depends on the size and type of the property. As of 2025, the following base rates apply:

• 1% — for residential property up to 150 m²;
• 8% — for residential property over 150 m²;
• 18% — for commercial property (offices, shops, hotel rooms).

In certain premium projects, the rate can be increased to 10%, but in practice the vast majority of apartments and flats are taxed at 1%. For example, for an apartment priced at $200,000, the VAT savings would be $2,000 — a significant amount that could cover furnishing or paperwork costs.

Who is Eligible for VAT Exemption

The right to the exemption applies to two categories of buyers:

1. Foreign nationals who have not resided in Turkey for more than 6 months in the last year. Having a residence permit does not disqualify you — what matters is the actual time spent in the country.
2. Turkish citizens who permanently reside abroad (more than 183 days per year) and hold a work permit in a foreign country. An important nuance: if a Turkish citizen lives abroad but works for an organisation based in Turkey, the exemption does not apply.

The exemption also applies to foreign companies that do not carry out commercial activities in Turkey and do not have a Turkish representative office.

Five Mandatory Conditions for VAT Exemption

It's not enough just to be a foreigner. To legally avoid paying KDV, all five conditions must be met simultaneously:

1. Primary market. The property must be purchased directly from a developer or construction company. A secondary market apartment does not qualify.
2. Payment in foreign currency. The entire transaction amount must be transferred in US dollars, euros, or another foreign currency via bank. Payment in Turkish lira cancels the exemption right.
3. No long-term residence in Turkey. The buyer must not have stayed in the country for more than 6 months during the year preceding the purchase.
4. No resale within one year. The property cannot be sold or transferred to another person within 12 months from the date of title registration.
5. First property purchase. The exemption is granted only for the first purchase. If you already own property in Turkey, the exemption does not apply.

Application Procedure: A Step-by-Step Guide

The VAT exemption is processed simultaneously with the registration of the purchase-sale transaction. The process is as follows:

1. Choosing the property and developer. Make sure the seller is an accredited construction company with the right to sell on the primary market.
2. Preparing documents. A foreigner will need: a foreign passport, an entry-exit record from Turkey (confirming less than 183 days of stay), and a bank statement showing the payment transfer in foreign currency.
3. Submitting the application. The documents along with the VAT exemption application are submitted to the tax office (Vergi Dairesi) for the area where the property is located. The developer usually assists with the paperwork.
4. Tax office review. The tax office checks compliance with all conditions. If the decision is positive, a KDV exemption certificate is issued.
5. Title deed registration. With the certificate, the buyer goes to the Land Registry Office to register the title deed (TAPU) — now without VAT included in the price.

It is recommended to involve a licensed lawyer specializing in Turkish law in the transaction: they will oversee the correct paperwork and protect against errors that could lead to a denial of the exemption.

VAT Exemption vs. Tax Free: What's the Difference

Many people confuse the VAT exemption on property purchases with the Tax Free system for tourists. These are two fundamentally different mechanisms:

• Tax Free allows you to get a VAT refund (usually 8–20%) on purchases of goods — clothing, electronics, jewellery — when taking them out of Turkey. The minimum receipt amount is 1,000 TRY. The refund is given in cash or to a card at the airport.
• VAT exemption when buying property — the tax is simply not charged if the above conditions are met. There is no "refund" after the fact: you either pay KDV at registration, or you don't.

Frequently Asked Questions

Can I get the exemption if I already have a residence permit in Turkey?

Yes, having a residence permit is not an obstacle. The key criterion is actual time spent in the country: less than 183 days per year. If you hold a residence permit but permanently live abroad, the right to the exemption remains.

What happens if I sell the property earlier than one year?

Violating the one-year resale moratorium obliges the owner to pay the VAT in full retroactively, and penalties may also apply. If you are planning a short-term investment, consider this risk.

Does the exemption apply to commercial property?

Yes, the VAT exemption also applies to commercial properties — offices, shops, warehouses. The conditions are the same as for residential: primary market, payment in foreign currency, non-resident buyer.

Conclusion

VAT exemption when buying property in Turkey is a real way to save from 1% to 18% of the property price. The benefit is available to most foreign buyers purchasing housing on the primary market, and is processed directly during the transaction. The key is to check compliance with all five conditions in advance and entrust the transaction support to professionals. With a proper approach, you get the property without unnecessary tax burden and with full legal protection.