Turkey Property Taxation And Rental Income

Turkey Property Taxation And Rental Income

Turkey’s tax system is an essential part of the economy and can be divided into three main categories. Personal income tax and corporate tax.  Taxes on VAT, banking, insurance transaction tax, stamp duty, and other costs. Wealth tax such as property tax, inheritance tax, and gift tax.

  • Turkish income tax

Is levied on the domestic and foreign income of individuals and businesses residing in Turkey. Foreigners who earn income in Turkey through employment,  property, running a business, or other income-generating activities are taxable, but only on income earned in Turkey.

  • Property tax

Is a local tax levied on the value of Turkish real estate (land and buildings)? The applicable tax rate depends on the property classification.  Homes and land are taxed at 0.1% of their value. The tax rate is 0.1% for land in general, 0.2% for buildings, and 0.3% for building land and vacant lots.

If the recipient of the rental income is a foreign natural person, the property is subject to real estate transfer tax. If there is no double taxation treaty between the Republic of Turkey and the country in which the foreign owner resides, the property will be taxable. If such an agreement is valid, action will be taken according to the relevant judgment.

If a foreigner is constantly involved in a sale transaction, the acquisition will be recognized as business income and the income earned from the sale of the property will be subject to capital gains tax (CGT).

  • Rental income acquired from a foreign company 

Foreign companies operating in Turkey are considered restricted taxpayers. Only rental income generated within the Turkish border is taxed through the closure of the business or building it owns. Payment freezes apply to taxpayers who have restricted rent payments. The aforementioned payment freeze must be reported to the tax office by the rent taxpayer.

  • Real Estate Sales Incomes Acquired via way of means of Foreign Companies

In case the restrained taxpayer overseas businesses promote their belongings in Turkey, the earnings obtained might be decided in the context of company tax. As stated above, whether or not this acquisition is business or whether or not the capital obtains earnings can differ. Income from the acquisition and sale of the belongings might be challenging to company earnings tax. The fees of company tax had been given above.

  • Stamp Duty

When you’re making the sale agreement, you’ll also need to pay 0.948 percent stamp duty, calculated over the value defined on the agreement.

  • Purchasing Tax

When you buy a house in Turkey, you will be issued a certificate of title “Tap” in Turkish. This costs a fee of 4% of the real estate price. This amount is usually split in two and paid by the buyer and seller. However, depending on the agreement between the two parties, you, the purchaser, may have to pay the full amount and vice versa.


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