Basic real estate taxes in Turkey


For many years Turkey remained a favorite destination for foreigners.
Many come here to acquire real estate. There is everything you need for a good life here: a pleasant climate, affordable prices, quality service, opportunities for business, and education. Purchasing a house is simple and transparent. In a short time, anyone can become a house owner and receive a residence permit.
There are some taxes and expenses that the future owner will incur.

Real estate purchase tax

The purpose of this fee is the official registration of property rights. It is 4% of the cadastral value of the property. 
The payment is made equally by the seller and the buyer before ownership transfer. However, the buyer pays most of this fee.
Important inforamation!
According to the new law, passed in March 2019, an official appraisal is required before the sale is made. A commission determines the rate of the state tax. The price of the property cannot be lower than the value established by the cadastral department. The tax depends on the cost of the property. You must pay it to the state bank upon receiving TAPU from the land registry office. The tax is to be paid made in Turkish lira.
What does the state collect this tax? To protect the buyers, reduce treasury losses due to miscalculated fees, and collect adequate statistical data on the market.

TKGM or the General Directorate of Land Registry and Cadastre obliges foreigners that wish to buy a house in Turkey to present a property appraisal document. Apprisal specialists charge about 1000-2000 TL.
Other fees include:
  • notary services, re-registration of utility contracts, document translation (about 600 Euros);
  • earthquake insurance (56 Euro per object).

Annual property tax

Regardless of the type of object you own, you must pay property tax every year. The rate depends on the type, status, and location. It is a fraction of the total value indicated in the TAPU.
Tax rate per square meter for:
  • residential real estate - 0.001;
  • commercial - 0.002;
  • "Arsa" land plots - 0.003;
  • "Arazi" land plots - 0.001.
When a property is a part of the cultural heritage, the fee increases by 10%. This fee is called a cultural contribution (kültür payı).
How to pay the annual property tax?
You can divide the payment divided into two parts. Most property owners pay around € 70 per year. Owners of larger houses pay approximately € 100 or more. You can make the first payment in May, and the second one before the end of autumn. Otherwise, it is best to make the payment at the beginning of the year.
Tax rates are twice as big in Istanbul, Alanya, Antalya, Izmir, and some other cities. Real estate is expensive in those areas.
You can pay the fee at the city administration, called Belediye, or online. You must have TAPU on you. The staff will hand you a receipt and suggest a bank where you can make the transaction.
Garbage collection tax is mandatory too. It depends on water consumption: 39 kurus per cubic meter. As a rule, it doesn't exceed 10 €. If you do not pay the annual tax on time, you will face a fine. The fine depends on the delay of payment.

Rental tax

The government also taxes rental income. The tax rate is relative to the total profit. The individual income tax rate is 22% of the profits made. There are cases when landlords negotiate with tenants to pay in cash to avoid taxation. Know that every year the control over illegal activities increases, it will be much more difficult to evade taxes. 

If the rental income is below 4800 TL (about €730) the fee may not be charged. The tax-free limit is TL 30,000 (approximately €4600).
If the total income is below 13,000 TL, the rate is 15% of the annual profit. If the total income is 110,000 TL (about €17,000), the rate is 35 percent.

Real estate income tax

The sale of real estate is taxed separately. For a legal entity, the rate is 22% of theе received net profit. Individuals are not charged if they have owned the property for more than five years. However, a four-percent property purchase tax is charged regardless.
If the house is sold earlier within the first five years, the rate is the difference between the purchase cost and the new valuation from the next certificate of ownership. 
If the profit is less than 11,000 TL (about 1,700 Euros), then the fee is not charged.

In the process of buying or selling housing in Turkey, many turn to specialized agencies. There are no specific regulations and fees are negotiated individually. In some cases, haggling is appropriate.

Inheritance and gift taxes

Inheritance and gift tax rates are based on the value of the inherited property registered in TAPU or determined by a court order.
According to official statistics, a house worth 210,000 TL (32,500 Euros) has a gift tax of 10% and an inheritance tax of 1%. Properties priced in the range of 210,000 to 500,000 TL are subject to a gift tax of 15% and an inheritance tax of 3%. Immobile property valued between 500,000 and 1,110,000 is taxed at 5% when inherited and 20% when gifted. As you can see, the rate rises with the value of the house.
To get more detailed information on these issues, you should contact the specialists. That way can get the information you need to plan your budget.

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