Taxes in Türkiye, part three (property tax)
Have you decided to buy a property in Türkiye? Congratulations! Türkiye is a beautiful country with a rich history, dynamic culture and a booming real estate market. However, it is important to find out about Turkish property tax (Turkey Property Tax) before final signing the contract. Understanding these taxes will help you accurately calculate and plan for the final cost of your investment. In this post, we will review the third part of taxes in Turkey, so stay with us, if you haven’t read the first and second part, click on each one.
Why is it important to understand Turkish property tax?
The Turkish real estate market has become increasingly attractive to foreign investors. The Turkish government has many incentives for foreign buyers, including the granting of residency and citizenship through real estate investment. But, keep in mind that the costs associated with owning a property go beyond the initial purchase price. Turkish property tax is an important part of these costs.
Understanding the different types of Turkish property tax (Turkey Property Tax) will allow you to:
Manage your budget effectively.
Avoid any financial surprises in the future.
Make informed decisions about your investments.
Understanding the different types of Turkish property tax (Turkey Property Tax) will allow you to:
This comprehensive guide to Turkish property tax (Turkey property tax) will provide you with all the information you need. We will explain the different types of taxes, how they are calculated and payment deadlines.
What kind of property tax is there in Türkiye?
In Turkey, there are different types of Turkish property tax (Turkish property tax) that property owners face. In the following sections of this guide, we will examine each of these taxes in more detail. But, to have an overview, here is a list of the most common types of Turkish property tax (Turkey Property Tax):
Property transfer tax: It is a tax that is paid when buying a property.
Property rental income tax: It is a tax that is paid for property rental income.
Real Estate Capital Gains Tax: This is a tax that is paid when the property is sold.
Annual Real Estate Tax: It is the annual tax paid for owning real estate.
Inheritance tax: It is a tax that is paid when inheriting property.
Tax on gifted property: It is a tax that is paid when a property is received as a gift.
Value Added Tax: In some special cases, Value Added Tax is also applied to real estate transactions.
Kargar Consulting and Investment Company with more than 14 years of brilliant experience in the field of investment and property purchase in North Cyprus and with more than 18 active branches in Iran, Turkey and North Cyprus is ready to guide you in all stages of property purchase in Turkey. slow In the next part of this guide, we’ll go over the details of the property deed transfer tax, the first Turkish property tax (Turkey property tax) you’ll encounter.
To read the rest of this guide and learn more about Turkish property tax (Turkey Property Tax), stay with Kargar Investment and Consulting Group.
Property transfer tax in Türkiye
The Property Deed Transfer Tax is the first Turkish property tax (Turkey Property Tax) you will encounter. This tax is paid when the property is purchased and is divided equally between the buyer and the seller. The property transfer tax rate is 4% of the total value of the property. For example, if you buy a property for 100,000 Turkish Liras, you must pay 4,000 Turkish Liras in property transfer tax.
How to pay property transfer tax
Property transfer tax must be paid to the buyer at the time of transfer. This is done at the Land Registry Office. To pay taxes, you must provide the following documents:
Property document (Tapu)
Passport or ID card
Tax number (Vergi Numarası)
How to pay property transfer tax
Tax exemptions for the transfer of property documents
In some cases, you may be exempt from paying property transfer tax. For example, if you are buying a property in Turkey for the first time, you may be exempt from paying 50% of the tax. Also, if you inherit property from your spouse or children, you may be exempt from paying the tax.
Tips on Property Deed Transfer Tax
Be sure to research the property transfer tax rate and any tax breaks you may be eligible for before buying a property.
When negotiating the purchase price of the property, keep in mind that you will also have to pay the property transfer tax.
Get help from a qualified tax advisor to pay property transfer tax.
Property rental income tax in Türkiye
If you rent out your property in Türkiye, you must pay property rental income tax. The property rental income tax rate is determined based on your annual rental income. The tax rate is as follows:
Up to 18.000 Turkish lira: 15%
18,000 to 40,000 Turkish lira: 20%
40,000 to 98,000 Turkish lira: 27%
98,000 to 500,000 Turkish lira: 35%
More than 500,000 Turkish lira: 40%
How to calculate property rental income tax
To calculate property rental income tax, you need to do the following steps:
Calculate your annual rental income.
Find your income tax rate from the table above.
Multiply your annual income by the tax rate to get the amount of tax you pay. For example, if your annual income from property rental is 50,000 Turkish Liras, you must pay 17,500 Turkish Liras in property rental income tax. This amount is calculated as follows:
50,000 Turkish lira (annual income) x 35% (tax rate) = 17,500 Turkish lira (tax amount)
Deadline for paying property rental income tax Property rental income tax must be paid by the end of March every year.
How to calculate property rental income tax
Real estate tax in Türkiye
When selling property in Türkiye, you may be subject to capital gains tax. This tax is applied to the profit from the sale of your property. The real estate tax rate is 35%.
How to calculate real estate tax
To calculate real estate capital gains tax, you must perform the following steps:
Calculate the selling price of your property minus your original purchase price (plus any purchase-related costs).
Multiply this amount (the profit from the sale) by 35% (the tax rate) to get the amount of tax you pay.
For example, if you bought a property for 200,000 Turkish Liras and sold it for 300,000 Turkish Liras, you would have to pay 35,000 Turkish Liras in real estate tax. This amount is calculated as follows:
(300,000 Turkish lira (selling price) – 200,000 Turkish lira (buying price)) x 35% = 35,000 Turkish lira (tax amount)
The deadline for paying taxes on the increase in the value of real estate
Real estate tax must be paid by the end of March of the year following the sale of the property.
Tax exemptions for real estate capital gains tax
In some cases, you may be exempt from paying real estate capital gains tax. For example, if you own a property for more than 5 years, you may be exempt from paying the tax. Also, if you have purchased a property for your residence and lived in it for more than 5 years, you may be exempt from paying the tax.
Tips on Real Estate Capital Gains Tax
Before selling your property, be sure to research real estate capital gains taxes and any tax breaks you may be eligible for.
Get help from a qualified tax advisor to calculate real estate capital gains tax.
Keep in mind that failure to pay real estate taxes can result in fines and penalties.
Annual real estate tax in Türkiye
In Türkiye, property owners are required to pay an annual real estate tax. The rate of this tax is 0.1% of the reduced value of the property. Deductible property value is determined by the Turkish Tax Administration.
How to pay annual real estate taxes
Annual real estate taxes must be paid by the end of November each year.
Inheritance tax in Türkiye
If you inherit property in Türkiye, you may be subject to inheritance tax. Inheritance tax rates are determined based on your relationship with the deceased and the value of the estate. The tax rate varies from 1% to 40%.
Tax on gifted property in Türkiye
If you receive property as a gift in Türkiye, you may be subject to gift tax. The tax rate on gifted property is determined based on the value of the property and your relationship with the donor.
Value added tax in Türkiye
In some special cases, real estate transactions in Türkiye may also be subject to VAT. The value added tax rate is 18%.
Items that are subject to value added tax:
Buying a new property from a builder or developer
Purchase of commercial property
Providing services related to real estate, such as leasing, real estate management and real estate consulting
Items that are not subject to value added tax:
Items that are not subject to value added tax:
Buying an existing residential property from a private owner
Sale of existing residential property
How to pay value added tax
VAT is usually paid by the seller or service provider. However, in some cases, the buyer may be required to pay taxes.
Tips on VAT
Be sure to research VAT and whether you are liable to pay it before making any real estate transactions in Turkey.
For more information about VAT in Turkey, you can visit the website of the Turkish Tax Administration.
Conclusion
Property tax (property tax) is an important part of the cost of owning property in Türkiye. Understanding the different types of property taxes (property taxes) and their rates will help you manage your budget effectively and avoid any financial surprises in the future.
Tax on gifted property in Türkiye
Kargar Consulting and Investment Company with more than 14 years of brilliant experience in the field of investment and property purchase in North Cyprus and with more than 18 active branches in Iran, Turkey and North Cyprus is ready to assist you in all stages of property purchase in Turkey. including finding the right property, negotiating the price, obtaining necessary permits and paying property taxes (property taxes).
Frequently Asked Questions About Turkish Property Tax (Türkiye Property Tax)
1. What kind of property tax is there in Türkiye?
In Turkey, there are different types of property tax (property tax) that property owners face, including:
Property transfer tax
Property rental income tax
Tax on the increase in the value of real estate
Annual real estate taxes
Inheritance tax
Tax on gifted property
Value added tax
2. What is the property tax rate in Türkiye?
Property tax (property tax) rates in Turkey vary depending on the type of tax and your specific circumstances. For example, the property deed transfer tax rate is 4% of the total value of the property, while the property rental income tax rate is based on your annual rental income.
3. How do I pay property tax (property tax) in Türkiye?
The method of paying real estate tax (property tax) in Türkiye varies depending on the type of tax. For example, the property deed transfer tax must be paid at the time the property deed is transferred to the buyer’s name, while the annual real estate tax must be paid by the end of November each year.
4. What exemptions are there for property tax (property tax) in Türkiye?
In some cases, you may be exempt from paying real estate tax (property tax) in Türkiye. For example, if you are buying a property in Turkey for the first time, you may be exempted from paying 50% of the property deed transfer tax. Also, if you inherit property from your spouse or children, you may be exempt from paying inheritance tax.
5. Where can I go for more information about property tax (property tax) in Turkey?
You can visit the website of the Turkish Tax Administration or consult a qualified tax advisor for more information about real estate tax (property tax) in Turkey.
6. Can Kargar Investment and Consulting help me with property tax (property tax) in Turkey?
Yes, Kargar Consulting and Investment Company with more than 14 years of brilliant experience in the field of property purchase and investment in North Cyprus and with more than 18 active branches in Iran, Turkey and North Cyprus is ready to assist you in all stages of property purchase in Turkey, including finding the right property, negotiating the price, obtaining the necessary permits and paying property tax (property tax).
