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Legal Alerts

The Sale Ban Period for Deliveries of Residences and Workplaces Exempt from VAT that is Applicable to Nonresidents in Turkey has been Extended

Legal Alerts
Real Estate

Law No. 7394 on Amending the Law on Immovable Property of the Treasury and Amending the Value Added Tax Law and Amending Some Laws and Decrees (“Law“) was published in the Official Gazette dated 15 April 2022 and numbered 31810. One of the provisions set out under this Law is the amendment to the duration of the sale ban in relation to the value-added tax (“VAT “) exemption that applies to foreign real and legal persons and Turkish citizens living abroad under certain conditions.

What does the Law say?

The Law stipulates some amendments to Value Added Tax Law No. 3065 (“VAT Law“). One of these amendments is related to the VAT exemption provided for residence or workplace acquisitions by foreign real and legal persons and Turkish citizens living abroad.

According to the VAT Law, a VAT exemption will apply to foreigners and Turkish citizens residing abroad for more than six months for the first delivery of a residence or a workplace, under the condition that the sale price is brought into Turkey as foreign currency.

Before the amendment, it was possible for people who acquired a residence or a workplace by benefitting from this exemption to transfer the real properties in question one year after the acquisition without being subject to any penalty. However, the amendment has increased this time limit to three years.

Accordingly, if the sale takes place within three years from the date of the title deed registration, the VAT that was not collected before will be paid by the transferring party with the deferred interest.

The effective date of this amendment is 1 May 2022.


Increasing the duration of the sale/transfer prohibition from one year to three years for people who purchase residences and workplaces within the scope of the VAT exemption, aims to make it less appealing to benefit from this exemption, though this amendment also prevents the abuse of the VAT exemption in practice.

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