VAT Discount on Housing in Turkey with All Details

In the regulation made with the President's Decision, the VAT discount on housing prices in Turkey was published in the Official Gazette on 29 March 2022. According to Presidential Decree No. 5359, which was published, the VAT rate was reduced by 8% in residences with a net area of up to 150 square meters in metropolitan areas. VAT discount in housing will be valid for projects that have received a license as of April 1, 2022. VAT deduction will not be applied to projects that have been licensed before this date. This regulation on VAT rates has brought some question marks. We tried to answer the questions about VAT reduction in house sales in Turkey with all the details.

VAT reduced to 8% in residences

According to the latest regulation, the metropolitan VAT regulation was abolished and VAT application was introduced at the rate of 1, 8, and 18 percent for apartments with a net area of up to 150 square meters in metropolitan areas. These changes will come into effect on April 1, 2022.

All details about VAT discount

8% VAT for residences with a net area of less than 150 square meters

Within the scope of the Metropolitan VAT regulation, the VAT rate was determined as 8% in the delivery of houses with a net area of up to 150 square meters. The 1% VAT system applied in other cities was also changed. Starting from April 1, 2022, VAT has been determined as 8% for residences with a net area of less than 150 square meters in all provinces of Turkey.

VAT 1% on residences built within the scope of the transformation of risky buildings

1% VAT will be applied to residences with a net area of up to 150 square meters, built within the scope of transformation projects in areas with risky structures in areas identified as risky areas and reserve building areas within the scope of Law No. 6306. However, in apartments built within the framework of the urban transformation legislation and whose net area exceeds 150 square meters, VAT will be applied at the rate of 1 percent up to 150 square meters, and 18 percent for the remaining section.

VAT 8% on land deliveries

With the new regulation, as of April 1, 2022, VAT will be applied as 8% instead of 18% on land deliveries.

What will be the VAT rate for residences larger than 150 square meters?

It is stated that 8% VAT will be calculated for the section up to 150 square meters, and 18% VAT will be calculated for the section exceeding 150 square meters. For example; It is stated that 8% VAT will be applied for the part up to 150 meters of a 180-square meter residence, and 18% VAT will be applied for the remaining 30 square meters.

Is there a change in the VAT rate of commercial properties?

No, there is no mention of any VAT changes regarding commercial properties.