A new tax cut targeting the Turkish real estate sector

Turkish President Recep Tayyip Erdogan announced a package of value-added tax cuts in the country that included several economic sectors, and this came during a press conference held by the Turkish President after the weekly government meeting at the Presidential Complex in the Turkish capital, Ankara.

The real estate sector was one of the sectors covered by the new value-added tax cuts, which can be summarized in the following points:

• Reduction of value-added tax for agricultural and construction lands

According to the presidential decree, the value-added tax on lands prepared for construction or agricultural use was reduced from 18% to 8%, and thus a large tax burden was taken off the shoulders of investors in construction lands intended for the establishment of housing projects, considering that the price of the land on which to build or establish projects constitutes the largest part of the project costs.

• The application of the gradual calculation to large residential apartments

With the new presidential decree package, the method of calculating the value-added tax for residential apartments was modified, which was imposed at 8% on apartments with a net area of ​​less than 150 square meters and 18% on apartments with a net area of ​​150 square meters or more.

According to the new amendments, the value-added tax for apartments with a net area of ​​more than 150 square meters will be calculated at 8% for 150 square meters of the net area of ​​the apartment, and 18% for the number of meters in excess of 150 square meters.

• Amendments to the value-added calculation of urban transformation housing

As for the residential apartments within the framework of the urban transformation process, which aims to renovate some old residential blocks and fortify them against earthquakes, their value-added tax will be calculated gradually as well.

Where the value-added tax is calculated at 1% for apartments of less than 150 square meters, and for larger apartments, the tax will be calculated at 1% on 150 square meters of its net area, and the value-added tax will be at 18% for the number of square meters over 150 square meters of the net area of ​​the apartment.

• The new modifications do not include the old licenses

It is indicated that the amendments approved by the Turkish Presidency to the value of the value-added tax for the properties in question will be valid on the properties whose construction permit was obtained after the date of the decision, and will not be valid on the properties whose construction permits were obtained before the date of the decision.

Detailed information about the real estate tax in Turkey can be found in our article Information On Tax On Luxurious Real Estate In Turkey.

It is noteworthy that some details of the approved tax cuts will become clear after the issuance of the executive regulations and instructions for the decision, which are expected to be issued in a few days.

Edited by Imtilak Real Estate ©

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