In the VAT system in housing, a new model comes into play that will relieve both the consumer and the industry. Double VAT system is introduced for residences over 150 square meters. VAT, which was ₺180 thousand in the old system, for a 155 square meter house worth ₺1 million, will decrease to ₺83 thousand 217 in the new system.
According to the breaking news; In the new model, there is a double VAT system for residences over 150 square meters. For example, in an apartment of 155 square meters, there will be 1-8% VAT for the part up to 150 square meters, as in the current system.
The 5 square meter section will be subject to 18% VAT. The gradual tax reduction will also put an end to the square meter game in housing. Following the 7-point tax reduction on basic food products by the Ministry of Treasury and Finance, eyes were turned to new steps to be taken in VAT.
VAT DISCOUNT IS NEXT
Workshops conducted by the Revenue Administration with chambers and sector representatives continue. While the demands from the sectors are being recorded, applications that will reflect on the pockets of both the citizens and the sector will be implemented, as in the case of food.
According to the information obtained, after the food, there is the VAT discount for the residences. Sector representatives demand that taxes on basic needs such as electricity, water and natural gas be reduced.
ENDING THE SQUARE METER GAME
At the meetings, it was pointed out that illegal practices such as making flats look small in order not to pay 18% VAT because they exceed 2 meters in residences. In the workshops, the Ministry of Finance has put all the demands on its agenda, from tax reductions for residences over 150 square meters to lowering the fee, which is 20 per thousand for the first residence.
There was a consensus on the gradual VAT rate. Thus, the square meter game, which is one of the important problems faced by the citizens who buy a house, will come to an end. It will encourage the use of the net square meter of the house in the project, sale and title deed.
HOW WILL THE NEW SYSTEM WORK?
In the current practice, the VAT system is applied at a rate of 1-8% up to 150 square meters. There is 18% VAT for residences over 150 square meters. When a residence is 149 square meters, 1-8% VAT is paid, while when it is 151 square meters, this rate rises to 18%.
According to the new system, 1-8% VAT will be applied for up to 150 square meters, and 18% VAT will be applied for 5 square meters above. For example, ₺80 thousand of VAT is paid for a 150 square meter flat of ₺1 million, while ₺180 thousand of VAT is paid for 155 square meters. With the new system, the 5 square meter section will be taxed at 18%. Since the price per square meter is ₺6 thousand 451, for the value of 5 square meters, ₺32 thousand 255, ₺5 thousand 805 VAT will be deducted from 18%. In this case, the amount to be paid will be ₺83 thousand 217.
VARIES DEPENDING ON THE DISTRICT
VAT in housing varies from 1 to 8%, depending on the district. In house sales, VAT is only collected from new houses. For this reason, VAT reduction in housing does not include second-hand housing sales and does not affect the prices of these houses.
For example, a flat in Cankaya and a flat in Mamak are calculated differently. Therefore, VAT varies between 1 and 8%.
This application will not change in the arrangement to be made. 1% VAT will continue in urban transformation, building cooperatives and TOKİ’s.
Source: Sabah / Translated by Irem Yildiz