Basic property-related taxes
With regard to real estate in Turkey, following taxes or compulsory insurances are possible:
- Real Estate Acquisition and Purchase Tax (at the time of purchase or sale)
- Earthquake insurance (a nationwide contribution rate is applied)
- Property tax
- Personal income tax (based on rental income and capital gains)
- Inheritance and Succession tax
- VAT (if a commercial delivery takes place)
- Corporate tax (if a company has a business transaction)
More information about the Turkish Revenue Administration tax system of taxation can be found in the booklet prepared by the Presidency in Turkey.
Real Estate Sale and Acquisition Levy
Each of buyer and seller is to pay real estate sale-and-acquisition levy of 2%, based on the declared value of the asset (This value cannot be less than the threshold determined by authorities). It is collected in prior to the transfer of ownership at TAPU office.
Property is to be insured by the owner against the earthquake risks. It is compulsory and a national uniform tariff is applied.
Other property insurance types can be freely bought from the market and they cover some risks including theft and fire. For further information please visit our insurance page.
Real Estate Tax
Registration of the property under your name at the municipality must be issued. We assist you to register with the local municipality to pay yearly property tax.
Tax is calculated on the basis of the declared value of the asset which could not be less than a threshold determined by tax authorities.
Tax payments are made in two equal instalments in the period March-to-May and November each year and those are collected by the local governments (municipality).
The tax base is annually updated by a coefficient determined by the Ministry of Finance taking into account the inflation rate.
Real Estate Tax of the property in the year of acquisition is paid by the seller whereas the consecutive years’ taxes are paid by the buyer (new owner).
You should contact your local council (Municipality) for more information and payment options. The tax is calculated based on the value of the property and is subject to thresholds set by the tax authorities as follows:
For real estate located outside of a metropolitan municipality:
Residences, Apartments 0.1%
Commercial Buldings 0.2%
Plots (Construction Purpose) 0.3%
For real estate located inside of a metropolitan municipality:
Residences, Apartments 0.2%
Commercial Buldings 0.4%
Plots (Construction Purpose) 0.6%
Personal income tax :
What gains can be attained through property? Are those gains taxed?
A real estate property may enable an individual to obtain two types of gains. There is no difference between foreign nationals and Turkish citizens in terms of taxes or fees. Tax rates can be updated periodically.
Firstly, you can rent it out and earn rental income. In that case, you are to pay a personal income tax.
If you rent your property to a person or company, you must submit a tax return to the nearest tax office for your rental income for the previous calendar year from 1 to 25 March. Taxes are paid in two equal installments, the first in March and the second in July.
Secondly, the market value of your asset may rise and hence you can attain a gain. If you sell out your real property in the five-year-period following the acquisition date, you shall be subject to personal income tax based on the difference between the selling price and the inflation-adjusted acquisition price.
For sales by individuals after the 5-year-period following the purchase, no personal income tax is charged on the gains to be attained.
Inheritance and Succession Tax:
The transfer of assets without any payment by way of inheritance or in Turkey are subject to inheritance tax.
A taxpayer is a person who acquires property through inheritance or free of charge.
Inheritance and gift tax are assessed on the return submitted by the taxpayer.
In the case of inheritance, the declaration must be submitted within four months from the date of death. Death occurs and taxpayers in Turkey Turkey is outside the return period is extended to six months. declaration time if there except death and Turkey, the taxpayers will still be four months. However, when the death occurs in a foreign country and the taxpayer is in another foreign country, the declaration period is extended for eight months.
For transfers made free of charge, the declaration must be submitted within one month from the date of acquisition of the property.
The tax base is updated annually. There are some discounts for inheritance to daughters, sons and spouses.
Please note that transfer of ownership of a property to an heir is subject to inheritance tax. Thus, if the heir sells out his inherited property, he is not subject to any personal income tax based on the capital gains.
if a company has a business transaction in real estate business;
Corporations with legal or business centers located in Turkey are qualiied as residents and are subjected to taxation on their income derived in Turkey. If both the legal and business centers are not located in Turkey, then these corporations are qualiied as non-residents and subjected to taxation only on their income derived in Turkey.
Corporate Tax Rate: In Turkey, the corporate tax rate levied on business proits is 20%. (The rate for corporate tax has been increased to 22% for the tax periods 2018, 2019, and 2020. However, the President is authorized to reduce the 22% rate down to 20%).
The Turkish taxation system levies value-added tax (VAT) on the supply and the importation of goods and services.
Liability for VAT arises when: A person or entity performs commercial, industrial, agricultural, or independent professional activities within Turkey
General VAT rate is 18%. However, some goods and services are taxed at either 1% or 8%.
Commercial delivery of a residential property with net area up to 150 m2 is subject to a VAT of 1% whereas commercial delivery of those with more than 150 m2 is subject to a VAT of 18%.