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09 August 2021

What are the taxes for buying property in Turkey?

The popularity of investing in Turkish real estate among foreign citizens is steadily growing. In addition to the favorable climate, beautiful nature, affordable prices and a large selection, investors are attracted by the excellent investment climate, relatively low maintenance costs and low tax liabilities.

Property taxes in Turkey are one of the hottest topics for foreign investors. It is this topic that we will consider in our article in detail.

Tax on the purchase of real estate

The cost of buying an apartment in the Republic of Turkey is small compared to other resort states. At the same time, there is no difference in the amount of payments between Turkish citizens and foreigners. This once again shows the government's disposition towards investors from abroad.

The new law on the sale of real estate in Turkey, published in 2019, was amended, according to which the amount of the fee is calculated based on the cadastral price of the object. Registration of real estate in Turkey involves the establishment of the cost of housing by a special commission of the Cadastral Chamber, on the basis of which an official certificate is issued to the buyer. This innovation made it possible to additionally protect depositors from fraud, as well as increase deductions to the state treasury. At the same time, the cadastral price is almost always lower than the market price.

The property tax in Turkey for foreigners is 4% of the appraised value.

Annual property tax

In the Republic of Turkey, as in any other country, real estate is subject to annual tax deductions.

The annual property tax in Turkey is set based on the characteristics of the property:

  • location;
  • property type (residential, commercial, land).

The calculation is based on the cost specified in TAPU.

It amounts to a property tax in Turkey from 0.2% to 0.6% of the cadastral price of the object. For Turkish apartments and houses, as a rule, the state duty is 0.2%. At the same time, only a tax on the object is paid for a detached mansion, such contributions are not provided for land.

How is the annual property tax paid?

State duty is paid either once a year or in two installments (in May and November, until the end of the month). You can do this in the city administration (belediye) at the location of the property.

To pay the property tax, it is enough to have a copy of the certificate of ownership (TAPU) with you. The cost is calculated by an employee of the city administration. On average, it is 70-100 euros. If there is no queue, payment will take only a few minutes.

In addition to paying at the cash desk, you can deposit funds online using your Turkish bank card. You will need to go to the municipality portal of the city where your property is located. In a special column, an individual tax number of the owner is entered, after which the system will issue all payments and tax arrears for garbage disposal. To pay, just select the desired items. After making the payment, save the invoice to your computer or print it out.

Important to know! In Turkey, debtors to pay the annual tax are fined. There is a penalty in the amount of a certain percentage of the amount of the debt.

State duty on the transfer of ownership

If the investor plans to transfer his property by inheritance, the tax will be 1% -10%. When making a donation agreement, tax rates vary from 10% to 30%. The amount of the state duty is calculated from the value of the object.

If the price of real estate is less than 200,000 Turkish liras, the inheritance tax will be 1% of the amount indicated in the TAPU. If the cost of housing exceeds several million liras, the payment will increase to 10%. Therefore, specialists approach each object individually.

Taxes on renting out real estate

Income from renting out housing in the Republic of Turkey is taxed. Its value is 15-40%. The amount of payments, naturally, becomes larger as the profit increases. If the annual income exceeds 600,000 Turkish Liras (about $100,000), the landlord (individual) will have to pay the maximum percentage of the amount. For legal entities, the fixed rate is 20%.

In some cases, there is no arena tax. In particular, it does not need to be paid if the income from renting does not exceed 6,600 Turkish liras per year, as well as if the income does not exceed 49,000 Turkish liras from the rental of commercial premises.

Short-term rent (for a day, several days, a week) is subject to 18% VAT on each amount received from tenants.

Luxury Property Tax

The Expensive Home Tax Law was officially adopted and entered into force in 2019. “Expensive houses” in the Republic of Turkey include real estate, the value of which exceeds 845 thousand US dollars.

The tax rates for expensive luxury property are calculated from the price of the object and are:

  • 0.3% for housing valued between $845,000 and $1.27 million.
  • 0.6% for properties priced at $1.27 million - $1.7 million.
  • 1% for properties over $1.7 million

Payment of tax twice a year (February and August) in two equal installments.

It is worth noting that Turkey provides tax incentives for the unemployed, pensioners and women. For example, older people whose only income is pension payments do not need to pay taxes.

The Turkish government is interested in replenishing the state budget with foreign investment. Therefore, every year the taxation laws for foreign investors are reviewed and simplified.

If you want to buy quality real estate in Alanya from a developer and you still have questions about what is before taxation, please contact Nordic Property Construction. Our managers will select for you the ideal apartments in the heart of the Turkish Riviera, and lawyers will additionally advise on issues related to tax payments when concluding a sale and purchase transaction and owning real estate.

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