Home    Double Vat For Those Who Cannot Pay The Housing Loan

When you buy your home with a loan, you pay 1.8 or 18 percent VAT. If you can not pay your loan, the bank seizes it and sells it at auction

The Council of Ministers decided in early 2013 that the value added tax (VAT) rate was set at 18 percent for the first purchase of 150 sq.m. large residences. Not only large housing, but the metropolitan area of land in metropolitan cities with a tax value of more than 1000 per cent of VAT was determined as 18 percent. Those between 500 and 1000 liras pay 8 percent and those who pay less than 500 liras pay 1 percent VAT. This means that VAT will be 18 percent in 28 percent of the houses to be sold in Istanbul. As a matter of fact, many houses were sold to that day. But now this arrangement has created a different problem. First of all, as much as 1 million 380 thousand houses have been sold until now by residential mortgage or similar mortgage method. Certainly some of these houses are still part of the debts paid. According to the latest figures of the Banking Regulation and Supervision Agency, the borrowers of the households who are buying the houses are currently receiving 146 billion liras. If the unpaid housing loan is borrowed, it is actually low. The problem lies in those who can not pay the loan.

Things You Want to Avoid When Applying for a Home Loan
18 Percent When The Bank Sells The House

According to the report of Rahim Ak from Habertürk; The VAT Law entered the circuit. Under normal conditions, the house is second hand, so even if it is sold now, it should not be VAT. However, the situation has changed because the house is sold through auction. It is stated in the VAT Act that goods sold through auction are subject to VAT. That’s why the bank, while selling the house, collected 18 percent VAT and paid taxes. As a result, when you pay 50 thousand liras of the loan which is received as 400 thousand liras besides the 72 thousand liras VAT which is paid by the citizens (total 50 + 72 = 122), you take out the letter you owe 22 thousand liras. Because the bank has paid 72 thousand pounds VAT. Naturally (72-50 = 22) the citizen who claims the difference will also pay this money. As a result, even though the house is bought and sold the same amount, the citizen who gets VAT of 144 thousand pounds from his pocket remains in a difficult situation. In the recent period, however, housing loans played an important role both in the economy and in the urban transformation towards depression.


If the citizen’s house bought and sold with cash, only 72 thousand liras would be payed as VAT. Second time there will be no VAT on sale. Although the number of people who can not repay the housing loans is low at present, this situation can create serious grievances in the coming periods.

Leave a Reply