Turkish VAT now on all new homes

Turkish VAT now on all new homes

Since 1st January 2013 VAT is now payable on new-build homes in Turkey of less than 150 metres square living space.

Until this point, homes of less than 150m2 did not have VAT applied to them, but now all new-build homes will have between 8 to 18 per cent VAT applied.

With the new-build market is still relatively buoyant in Turkey, what might this affect have on the market?

"Eighty per cent of foreigners purchase a home of less than 150m2 net living space but of course they don't all buy new-builds," says Cameron Deggin of Turkey agency, Place Overseas.

"Builders will have to pass on some of this cost to buyers and I think from the second quarter of this year, we will see prices go up.

"Any building licences granted up to 31st December 2012 will not come under the new rule, so the affect might not be immediately felt.

"But by halfway through the year I think we will see at least 10 per cent added to the price of new-builds, and the resale market might seem more attractive.

"Five years ago 90 per cent of what we sold was offplan, now is it is around 50 per cent, and likely to drop further with this new VAT.

"I think the Istanbul market, being predominantly offplan, will feel this new tax the most."

Click here to shop for Turkish new-builds before they go up!

Author

A Place In The Sun