Turkey: Retirees' Tax-Exempt Vehicle Purchase Claims Resurface Amidst Pending Legislation

Speculation is circulating on Turkish social media and some websites regarding the possibility of retirees purchasing vehicles with an exemption from the Special Consumption Tax (ÖTV). This idea, which gained traction previously, has resurfaced without any new developments on a legislative proposal first introduced in February 2026.

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Retirees will be able to benefit from the ÖTV exemption once every five years.

The proposal, put forth by Kadim Durmaz, a Member of Parliament from the Republican People's Party (CHP), is still awaiting discussion and approval in the Grand National Assembly of Turkey to be enacted into law. If passed, the regulation would allow retirees to benefit from the ÖTV exemption once every five years. A key condition stipulated in the proposal is that vehicles purchased under this exemption cannot be transferred or sold for a period of five years from the date of purchase.

Further provisions in the proposed legislation address scenarios involving natural disasters and accidents. It includes the right for retirees to purchase a new vehicle under the exemption if their previous vehicle becomes unusable due to events like earthquakes, fires, floods, or traffic accidents, and is subsequently scrapped. However, the proposal also states that if a vehicle acquired with the ÖTV exemption is sold, transferred, or changes ownership before the five-year period concludes, the unpaid tax will be collected along with late interest and related fees.

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If the vehicle purchased under the ÖTV exemption is sold, transferred, or changes ownership before the five-year period expires, the unpaid tax will be collected along with late interest and related fees.

Discussions surrounding the potential impact of such a law are ongoing. With approximately 17 million retirees in Turkey and annual new car sales around 1.2 million, the introduction of this exemption could significantly increase the number of vehicles on the road. Experts caution that a rapid rise in vehicle numbers could strain infrastructure, increase fuel and electricity demand, exacerbate traffic congestion, and heighten the need for parking. Potential effects on the spare parts market, credit usage, used car prices, and the current account deficit are also being debated.

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The proposal also includes the right to purchase a new vehicle under the exemption for vehicles that become unusable due to earthquakes, fires, floods, or traffic accidents and are scrapped.