Real Estate

VAT reduction will trigger new investments in real estate

Within the scope of the new VAT practices announced by President Recep Tayyip Erdogan, the rates in housing and land have changed. Within the scope of the new regulation, the VAT rate was increased from 1% to 8% for the portion of the net area of the houses up to 150 square meters, while it was determined as 18% for the portion exceeding this limit for the houses over 150 square meters.

OVER 150 M2

For example, ₺80 thousand of VAT was paid for a 150 square meter flat of ₺1 million, while ₺180 thousand of VAT was paid for 155 square meters. With the new system, the 5 square meter section will be taxed at 18%. This amount will be ₺5 thousand 805. In this case, the amount to be paid will be ₺85 thousand 805. The VAT rate on house deliveries will be rearranged to ensure that the purchased house is subject to VAT under the same conditions, regardless of the unit square meter value of the land or not. In urban transformation residences, on the other hand, VAT is determined as 1% for up to 150 square meters and 18% for the excess. On the other hand, the old provisions will continue to be applied for the housing constructions started before the date of entry into force of the decision. Another issue is that the VAT rate on land and land deliveries will be reduced from 18% to 8% in order to reduce the VAT-related financing burden of the construction industry.


KONUTDER President Altan Elmas said that it was a very correct decision to abolish the new VAT regulation according to metropolitan cities. Emphasizing that a fairer structure was created with the regulation, Elmas said, “Preserving the current situation in disaster-risk areas will also be a step that will accelerate the transformation.” GIGDER President Faruk Akbal stated that the office stock will melt with the VAT reduction.

Source: Sabah / Translated by Irem Yildiz

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