The Changes in Housing VAT Rates

The VAT rates for housing had some important changes. But how will these changes affect the housing sector and what are the differences? The answers are as below, but first, let’s remember the applied rates in order to make a comparison.

About the Rate Changes

The residences which have 150 m² net usage area used to have an 18% VAT rate and for the ones below 150m², the rate was 1%. Now with the changes; for houses that are above 150 m², there will be a tax reduction. For the ones below 150 m², there will be partial discounts and also partial raises.

According to the changes that VAT rates had on housing; the houses up to 150 square meters the rates will be 8%. The part that exceeds 150 square meters will be applied 18% VAT rate. Before these changes, the houses that are above 150 square meters had 18% VAT.

Depending on the new decisions, in order to reduce the costs in building trade the VAT rates in land sales also had a reduction and became 8%.

–The new VAT rates for houses under 150 m²;

Whether it is in the Metropolis or it is luxury the housing VAT rates will be 8% for square meters under 150.

–The houses that will have tax reduction;

If the land price per square meter is above 2.000TL the luxury houses built on it will have 8% VAT. Instead, they used to have 18%.

–The VAT rates that will have increase;

If the lands price per square meter is below 1.000TL the luxury houses that are built upon it will have 8% VAT instead of 1%.

The new VAT rates will be effectuated on April 1st, 2022 according to President’s decision.

For more information or explanation on the new rates please ask our consultants.