Property Taxes in Turkey

All over the world, property tax is something that can be quite difficult for people to get their heads around. In this short article, we’ll help you as the reader find out how property tax works in Turkey. The conversational topics mentioned will be the following. Property taxes, gaining income from property, being a resident of Turkey, VAT, commercial and residential properties, and finally, yearly property tax. To start, we’ll be going over what property taxes in Turkey are like at a fundamental level.

Property Taxes in Turkey

If you’re to own any specific property as of January 1st of the year, you’re required to pay the property tax for the year that you own the property. This figure for property tax is usually decided based upon the notional value of the property. This is usually decided by the local council of the area in which the property is based. The figure that’s decided usually lies between the range of 0.1-0.3 percent of the notional value every year. This is an incredibly low figure when compared to some of the figures in the more popular cities of Europe such as London.

However, there are scenarios in which you can be exempt from property tax. Such is the case for those living in smaller accommodations. However, if you are required to pay this tax fee, you have the option of paying it annually in a lump sum or throughout the year in two payments. It is also important to note that any unpaid tax on a property from previous owners remains on the property even when new ownership comes in, so ensure that any previous owners are not in debt of unpaid tax on the property you now own.

Getting Income From Property

If you’re gaining income from a property you own, there is also further details you must know. It is important to ensure that you set up a business separate from your property to gain a business license. This ensures that you will be taxed at the rate at which businesses are taxed in Turkey, only for your rental income instead. The rates for this are as follows. 15 percent for up to 18,000 Turkish Lira, 20 percent for 40,000 Turkish Lira, 27 percent for 98,000 Turkish Lira, and anything about that rate will be up to 35 percent.

If you resell a property there is also a tax on the capital gain. This ranges from 15-30 percent. However, if you own the property for more than five years, you will not be required to pay any tax on the capital gain of the property.

Being a Resident or a Non-Resident

If you’re a non-resident of Turkey, yet still own property there, you’re only liable to pay tax on all Turkish-derived income. However, the issue this would create usually is that you would also be liable to pay taxes in the country where you’re actually a resident. In Turkey though, they have a list to assist in these situations. If you’re a resident in any of the following nations. China, The United States of America, Iran, Qatar, Germany, The United Kingdom, or France, you’re able to use the tax you paid in Turkey in favor of the billing from your resident country.

Although as soon as you become a resident of Turkey, this status changes. You’ll instantly become liable for tax on all of your income worldwide. So it’s important to ensure that you do not stay in Turkey for over six months at any given time within an annual amount of time.

VAT (Value Added Tax)

There is also the concept of VAT to consider. This is otherwise known as Value Added Tax. If you’ve purchased a property in Turkey, the price of VAT is usually included in the purchasing price of the property. Usually, this is not up for debate. However, there are a few scenarios in which the value of VAT varies.

For Commercial Properties

For instance, VAT on commercial properties the value sits at 18 percent in all given situations.

For Residential Properties

However, for residential properties, VAT can range from 1 percent to 18 percent. For those who can afford to purchase larger properties, the higher VAT tax rate applies to the property they own. Whilst those who purchase smaller properties will only be required to pay the lower VAT rates.

Yearly Property Tax

In Turkey, the property tax on an annual scale ranges depending on the location that the property is situated in, and the type of property it falls under. For example, residential properties in large cities pay an annual tax rate of 0.2 percent. Whilst in small cities it is 0.1 percent. For commercial properties, the annual big city tax rate is 0.4 percent. With it being 0.2 percent in smaller cities. For other varying forms of properties such as farms, the rate is the same as residential properties. Whilst with land ownership the rate is slightly higher, coming in at 0.6 percent for larger cities, whilst being 0.3 percent in smaller locations.

Conclusion

So there you have the complete run-down of the property rates and categories of property payment if you are an owner of property in Turkey. Whether you live in the nation or not, the varying aspects of the circumstances still should be considered. Everybody has different scenarios and not all situations apply to the same people. Property tax is a complex situation with many varying facets that go into it. Ensure that you are seeking the right advice and information before committing to any purchases of property in Turkey. We hope this short article assisted in helping you as the reader further understand how some of the most important aspects of property tax work in Turkey.

For more information, please refer to our ultimate guide on Buying Property in Turkey.