Taxes come first on any prospective homebuyer’s mind before making any decision about whether they will invest money in real estate in any particular country. Lower rates or existing tax relief and incentives put in place by any government, as it is the case in Turkey, can make a country more viable in terms of getting a higher return on investment (ROI), particularly since tax rates directly affect your profits when buying real estate to either sell or rent.
The Turkish government has taken substantial steps in recent days in order to simplify its tax code, making it more in line with international standards, which in turn makes Turkey even more attractive to investors seeking to buy real estate in the country.
These steps have indeed made Turkish corporate tax legislation noticeably clear, and the country now boasts corporate taxes rates that are objective and are considered among the most competitive in the OECD region, clearing away any legal hurdles that may discourage investors from buying properties in Turkey and paving the way towards a surge in foreign investment in the country that is bound to reach spectacular growth rates in the years to come.
Aside from offering Turkish citizenship to investments worth over $1 million, and if you’re looking for yet another reason to invest in Turkey, these tax incentives will help convince you why it’s the best destination for your property investment:
Stamp duty at 0%
In January 2017, the stamp duty arising from the execution of a real estate “promise to sell” agreement has been decreased from 0.948 % to 0. Real estate promise to sell agreements are widely used by buyers in practice, in case the real estate is to be transferred in a projected time, upon completion of conditions precedent. . Likewise, the stamp duty arising from execution of residential property sales agreements with a down payment have also been reduced from 0.948 % to 0.
Fee adjustment to Land Registry
As per the decree dated March 2017, the land registry fees arising from an official real estate sale and purchase transaction, which are paid separately by both the seller and the buyer have been decreased from 2 % to 1.5 %.
Value Added Tax (VAT) exemption
As of March 2017, real estate purchases by non-resident foreign natural persons, foreign companies which do not generate income in Turkey via a workplace and permanent representatives, and Turkish citizens living abroad with a work or residence permit for a term of more than 6 months are exempted from value added tax (VAT) of 18 %.
It should be noted though that this exemption is only applicable to direct residential or workplace sales in which the buyer is expected to provide the purchase price from abroad in foreign currency and keep the real estate in their ownership for at least one year, so those looking to buy properties to sell immediately would not benefit from this particular incentive.
These recent incentives really help make 2017 the year to finally invest in Turkey’s real estate market, so you’d better hurry up and take advantage of the surplus this opportunity presents!