VAT Exemption in Turkey: The Three-Year Rule for Foreign Buyers
Turkey exempts qualifying non-resident buyers from VAT on the first delivery of a new residence or workplace. The conditions are narrow, the buyer carries personal liability if they are not met, and the holding period is no longer the one year most guides still quote.
A real exemption, with four conditions and a trap
Turkey does exempt some property purchases by non-residents from value added tax. The exemption is not a discount a developer offers, nor a concession negotiated at the land registry. It sits in Article 13(i) of Value Added Tax Law 3065, inserted by Article 7 of Law 6824 of 23 February 2017, and it either applies to a transaction or it does not.
The provision is tightly drawn. It covers deliveries of residences or workplaces, made to defined categories of non-resident buyer, on condition that it is applied on the first delivery of buildings constructed as a residence or a workplace, and that the price is brought into Turkey in foreign currency. Those two conditions are in the opening clause and qualify everything that follows.
Two further features are easy to miss and expensive to get wrong. The first is that a buyer who takes the benefit becomes jointly and severally liable with the seller for the tax, the tax loss penalty and the late interest if the conditions turn out not to have been met. The second is the holding period, which a great deal of English language material still reports incorrectly.
This guide sets out what the provision actually says, who it covers, and where the liability falls. It deliberately does not quote VAT rates: Turkish VAT rates on housing are set by Presidential Decision rather than in the Law itself, they vary by the characteristics of the property, and they change. Your adviser should confirm the rate applicable to the specific unit on the date of delivery.
If you are comparing stock, note that this exemption pushes decisively towards new build rather than resale, because only a first delivery can qualify.
Article 13(i) at a glance
Value Added Tax Law 3065, consolidated text
The questions that decide whether the exemption applies
Each one is drawn from the wording of Article 13(i). A no at any stage ends the analysis.
Is this the first delivery of the building?
The exemption applies on the first delivery of buildings constructed as a residence or a workplace. A unit that has been delivered once has exhausted it. In practice this means buying from the developer, and it is why the resale market sits outside the provision.
Is the property a residence or a workplace?
The provision speaks of buildings constructed as a residence (konut) or a workplace (iş yeri). That framing matters when what is on offer is something other than a completed building of one of those two kinds.
Is the buyer in one of the three eligible categories?
Turkish citizens living abroad for more than six months with a work or residence permit, excluding those within Income Tax Law Article 3(1)(2); foreign national real persons not settled in Turkey; and entities with no legal or business centre in Turkey that earn no income here through a workplace or permanent representative.
Is the buyer caught by the Income Tax Law exclusion?
Income Tax Law Article 3(1)(2) covers Turkish citizens residing abroad because of the work of official departments and institutions, or of organisations and enterprises whose centre is in Turkey, to which they are attached. Those people are taxed in Turkey on worldwide income and are expressly carved out of the exemption.
Is the price being brought into Turkey in foreign currency?
The condition that the price be brought to Turkey in foreign currency sits in the opening words of the provision and is not optional. It governs how the purchase is funded, which is a question to settle before committing, not after. See our guide to sending money to Turkey for a property purchase.
Can the buyer hold for three years?
Disposal within three years brings back the tax that was not collected, together with deferral interest under Article 48 of Law 6183, payable by the person disposing of the property before the title deed transaction. A buyer planning a short hold should price the exemption as a deferral, not a saving.
What Article 13(i) actually provides
It is worth being precise, because paraphrases of this provision circulate widely and most of them lose something. Article 13 of Law 3065 lists deliveries and services that are exempt from tax. Paragraph (i), added by Article 7 of Law 6824 on 23 February 2017, covers deliveries of residences or workplaces made to three categories of person, on condition that it is applied on the first delivery of buildings constructed as a residence or workplace and that the price is brought to Turkey in foreign currency.
The three categories are: Turkish citizens who, having obtained a work or residence permit, live abroad for more than six months, other than those specified in paragraph 2 of the first subsection of Article 3 of the Income Tax Law; foreign national real persons who are not settled in Turkey; and institutions whose legal and business centre is not in Turkey and which do not earn income in Turkey through a workplace or permanent representative.
The provision then adds two consequences in parentheses. First, where it is established that the exemption was applied although the conditions were not met, the buyer is jointly and severally liable with the taxpayer for the tax not collected in time, the tax loss penalty and the late payment interest. Second, where a residence or workplace acquired under the exemption is disposed of within three years, the tax not collected in time must be paid, together with deferral interest calculated under Article 48 of Law 6183, by the person disposing of it, before the title deed transaction.
One year became three years in April 2022
When the exemption was introduced in 2017, the restriction on disposal ran for one year. That is the figure embedded in a large body of English language guidance, law firm articles and agency marketing written between 2017 and 2022 — much of which is still online, still undated, and still being copied.
The consolidated text of Law 3065 carries a footnote against paragraph (i) recording that, by Article 10 of Law 7394 dated 8 April 2022, the expression bir yıl in the paragraph was changed to üç yıl. One year became three years.
The practical significance is straightforward but serious. An owner who bought a new build under the exemption and who relies on an out of date source may sell in year two believing the restriction has lapsed. It has not. The tax that was never collected becomes payable, with deferral interest, and it is payable before the land registry will process the transfer — so it surfaces at the worst possible moment, with a buyer waiting and a completion date fixed.
If you are planning an exit, read this alongside our guide to selling property in Turkey, and establish the delivery date of the property rather than the date you signed anything.
Joint and several liability, and why it changes your diligence
In most tax exemptions the person who gets the relief wrong is the person who claimed it. Article 13(i) does not work that way. The provision expressly makes the buyer jointly and severally liable with the taxpayer — that is, with the seller — for the tax not collected in time, the tax loss penalty and the late interest, where it is established that the exemption was applied without the conditions being satisfied.
That shifts what reasonable diligence looks like. It is not enough to be told by a sales office that the exemption applies. A buyer needs to be able to show that the delivery really was the first delivery of the building, that they really were outside Turkey in the sense the provision requires, and that the price really was brought into Turkey in foreign currency in the manner required.
Two of those are documentary questions that can be settled in advance. Residence status is the one that most often turns out to be more complicated than it looked, particularly for buyers who already hold a Turkish tax number, who spend substantial time in the country, or who have acquired a residence permit for other reasons. Being a foreign national is not the test; not being settled in Turkey is.
For buyers purchasing through a company, the third category has its own conditions — no legal or business centre in Turkey, and no income earned in Turkey through a workplace or permanent representative — which interact with how the structure is actually operated. Our guide to buying property in Turkey through a company covers the wider trade-offs.
Four things the exemption does not do
It does not cover resales. The exemption is tied to the first delivery of a building constructed as a residence or workplace. Buying from a previous owner falls outside it, regardless of the buyer's nationality or residence.
It does not remove the other costs of buying. VAT is one item among several in a Turkish purchase. Title deed charges, and the ongoing annual taxes an owner pays, are separate regimes with their own rules — see property taxes in Turkey و taxes in Turkey for foreigners.
It does not make a purchase safe. A VAT exempt new build is still a building that needs its permits, its habitation certificate and a clean title register. The exemption says nothing about whether the development is lawful or the title is clear.
It is not permanent once granted. The three year rule means the benefit is conditional for three years after delivery. Until that period has run, it is better understood as a deferral that becomes a saving if you hold.
Who the provision covers, and who it does not
The three eligible categories in Article 13(i), and three situations that fall outside it.
Foreign nationals not settled in Turkey
The core category. Note that the test is not nationality alone but not being settled in Turkey, which is a question of fact and of Income Tax Law definitions.
Turkish citizens living abroad
Those who have obtained a work or residence permit and live abroad for more than six months, excluding the people described in Income Tax Law Article 3(1)(2).
Non-resident entities
Institutions whose legal and business centre is not in Turkey and which do not earn income in Turkey through a workplace or a permanent representative.
Turkish state employees abroad
Citizens residing abroad because of the work of official departments, institutions or organisations centred in Turkey are expressly carved out by the Income Tax Law cross-reference.
Anyone buying a resale
The exemption attaches to the first delivery of the building. Once that has happened, later transfers of the same unit cannot use it.
Anyone paying from inside Turkey
The price must be brought into Turkey in foreign currency. How the purchase is funded is a condition of the exemption, not an administrative detail.
Before and after the 2022 amendment
What changed, what did not, and why the distinction matters to anyone selling.
| ویژگی | As widely reported | As the Law now stands |
|---|---|---|
| Minimum holding period | One year | Three years, since 8 April 2022 |
| Amending instrument | Not mentioned | Law 7394, Article 10 |
| Consequence of early sale | Often omitted | Tax plus deferral interest under Law 6183, Art. 48 |
| When the liability falls due | Often omitted | Before the title deed transaction |
| Who pays on early disposal | Assumed to be the seller only | The person disposing of the property |
| Buyer's exposure if conditions unmet | Rarely mentioned | Joint and several with the taxpayer |
| Scope | Described loosely as new property | First delivery of a residence or workplace |
| Currency condition | Sometimes omitted | Price must be brought to Turkey as FX |
Buying a new build as a non-resident?
We will establish in writing whether the exemption is available on a specific unit, and what the delivery date means for your three-year position.
Turkey VAT exemption: frequently asked questions
Answers drawn from the consolidated text of Value Added Tax Law 3065.
Related guides
The rest of the cost and compliance picture for a Turkish purchase.
- Property taxes in Turkey: what owners actually pay
- Taxes in Turkey for foreigners: residency and income
- Buying off-plan property in Turkey
- New build vs resale property in Turkey
- Sending money to Turkey for a property purchase
- Turkish tax number for foreigners
- Selling property in Turkey: a foreign owner's guide
- All Turkey property guides
Check eligibility before you commit
The VAT position on a new build is knowable in advance, from the delivery history of the building and your own residence status. It is a poor thing to discover afterwards, particularly given that the buyer carries liability if the exemption was wrongly applied.
