When buying property in Turkey, you need to be prepared for the fact that there are additional costs – TAXES. In order to avoid unpleasant “surprises”, find out everything in advance from your real estate agent.
The real estate tax rates are the same for both foreigners and Turkish citizens. The only difference in taxation for the purchase of real estate between foreigners and citizens of the Republic of Turkey is the amount of the TAPU re-registration fee (Döner Sermaye), in the case of the purchase of secondary real estate.
TAXES:
VAT (KDV)
There are 3 types of VAT rates in Turkey: 1%, 10% and 20%. Usually VAT of 1% is valid for inexpensive properties throughout Turkey. VAT 10% and 20% for expensive real estate. In large cities, a VAT rate of 10% or 20% is usually applied. In new properties, from developers, often VAT is already included in the price.
The government provides an opportunity to exempt foreigners from paying VAT when buying real estate from developers. This applies to investors who invest in Turkey for the first time and have not previously been a tax resident and, moreover, do not have a Turkish passport (paragraph 13, article 3065 of the VAT Code of February 23, 2017 and article 7 of Law 6824). Foreigners who are in Turkey on a business trip, vacation, medical treatment or study are not considered tax residents.
After the conclusion of the transaction, foreigners who purchase Turkish real estate are entitled to receive a tax deduction. This is done by filing a tax return.
After the received VAT deduction on the acquired property, it cannot be sold within a year.
ONE-TIME TAPU TAX (Tapu Devir Vergisi).
Part of the transaction is the payment for the registration of TAPU (ownership). The tax rate is 4%. When buying real estate from a developer, this tax is usually paid in equal parts by the buyer and the developer. Sometimes the builder takes full responsibility for these costs. But when buying on the secondary market – the buyer pays the tax.
The tax is calculated from the cadastral value of the object, registered in TAPU.
ANNUAL PROPERTY TAX (Yıllık Gayrimenkul Vergisi).
The total amount is determined taking into account the type and location of real estate (within 0.2–0.6%):
◉ RESIDENTIAL REAL ESTATE – 0.1% – 0.2%. For self-contained cottages taxes are provided without taking into account the land plots under them;
◉ COMMERCIAL REAL ESTATE – 0.2% – 0.4%;
◉ LAND FOR CONSTRUCTION – 0.3% – 0.6%;
◉ LAND PLOTS NOT INTENDED FOR CONSTRUCTION – 0.1% – 0.2%.
On PROFIT FROM LETTING OUT OF THE OBJECT (Emlak Kira Geliri Vergisi).
This tax is NOT COLLECTED:
From the income received when renting residential real estate – up to 21.000₺ per year
For commercial premises – up to 35.000₺ per year
In other cases, the tax rate is within 15 – 40%:
Up to 70.000 ₺ – 15%
If the profit exceeds 1.900.000₺ – 40%.
For LEGAL ENTITIES the fixed rate is 20%.
Here it is appropriate to add that we offer real estate with a rental yield of 5% per annum.
Income tax on the sale of real estate (Gayrimenkul Değer Artışı Vergisi).
For individuals, this tax is NOT COLLECTED if the owner has had the right of ownership for MORE THAN 5 YEARS.
If less than 5 years, real estate tax for foreigners is calculated from the difference between the cadastral value and the sale price of the object. The tax rate directly depends on the difference in this amount and can range from 15% to 35%.
For legal entities, the rate is fixed – 20%.
All exact amounts are calculated at the stage of selecting a specific property.
We perfectly understand you, the process of buying and selling in another country is not the easiest, and can cause a lot of discomfort and stress. To make this difficult journey easier, HOME AREA PROJE offers you its services. Our experts will offer you the most suitable options for real estate at your request, and in order to collect all the necessary documents, we will provide you with a lawyer. We wish you a comfortable purchase.