The Turkish government has exempted foreign buyers from paying 18% value added tax (VAT) when investing in real estate.
The exemption will also be applicable to Turks who have lived and worked abroad for more than six months.
Foreigners and overseas Turkish residents must pay in foreign currency, and not sell properties for at least one year after acquisition, to avoid VAT on the purchase of their first house or office in Turkey.
The Turkish government has offered many rebates and incentives recently to foreigners. The government announced in January that Turkish citizenship would be offered to foreigners who buy real estate worth $1 million, make a fixed capital investment of at least $2m, or keep at least $3m in a bank account for at least three years or create at least 100 jobs in the country.
Sales of properties to foreigners dropped 19% in the first 11 months of 2016 compared to the same period in 2015, according to Turkey’s official statistics agency, TUIK. Iraqis, Saudis, Kuwaitis and Russians bought the highest number of properties.
In contrast, domestic real estate sales increased 4.5% to 1.2 million properties in the first 11 months of 2016.
Experts say that the decline in property sales to foreigners can be attributed to rising security concerns.
Turkey, a tourism hotspot that historically attracted foreigners, has experienced a year of bloody attacks that have left hundreds dead and put the country on high alert.
