4 Discount on Residential VAT in Article

What Articles Does the Arrangement of VAT Discount on Housing Contain?

With the regulation made in 2013, the VAT rate in housing up to 150 square meters in metropolitan cities was determined depending on variables such as housing category and property tax. Due to the law and the preferred residential structure, this rate was applied as 1% mostly. With the arrangement made, the VAT is fixed at 8% in residential buildings with a net area of up to 150 square meters. In residences that are above this proportion in square meters, the portion of up to 150 square meters will be subject to 8% and the excess parts of 18%. The VAT of 18% on land and land has been reduced to 8%. The VAT rate of 1% in urban transformation residences is protected in buildings up to 150 m2, while in residential buildings exceeding 150 square meters, 18% VAT rate will be applied.

What Will The Impact of Regulation on Housing Prices?

One of the most curious issues is how VAT regulation will affect housing prices. Since there are substances that differ according to the structure of real estate (residential/land/land) and the square meter of housing, the effect of regulation may also differ according to these variables. In housing with a net area of up to 150 square meters, the VAT rate from 1% to 8% will be reflected in the housing prices in this category. Reducing the VAT rate by 8% on land and land could provide a partial reduction in construction costs. Reducing the VAT rate of 18% fixed to 8% for the part up to 150 square meters in buildings over 150 square meters, which can affect the luxury housing category especially comes across as your other factors.

When Does the Regulation Enter Effective?

In accordance with the provision “This decision shall enter into force from the beginning of the month following its publication” in the Official Gazette, the regulation will enter into force as of April 1 and for licenses received from this date will be valid. Existing provisions will apply to licenses obtained prior to this date.

How Will the VAT Regulation Affect Housing Procurements

There are very different variables that affect the supply and demand balance in the housing market. The increase in construction costs, the change in purchase parity, fluctuations in exchange rate, political tensions in our region are the most important topics affecting housing purchases. It is envisaged that this arrangement alone will cause partial mobility in certain categories rather than cause dramatic up-downs.