Making a property investment in a foreign country generally entails a slew of additional costs and taxes. Known as Katma Deger Vergisi in Turkey, VAT can be a significant expense when buying real estate but good news for foreigners looking forward to making property investment in Turkey is the VAT exemption. 

To boost the real estate market and to make buying property in Turkey more attractive for foreign nationals, the government has made changes to taxation laws and procedures. In 2017, a concession was made to exempt foreign buyers from paying VAT. Before the enactment of the VAT exemption law, foreign investor used to pay VAT when purchasing a commercial or residential property at rates ranging from 1-18%. The VAT exemption is especially attractive for investors who buy commercial properties in Turkey on which 18% value added tax is applied.