Real estate taxes in Turkey are imposed by the government on those who own property on its land, with the tax value determined according to state-approved mechanisms and suitable criteria.
What are the real estate taxes in Turkey? And what are its types? How is it paid?
Istanbul Experts will discuss the types of property taxes in Turkey and how they are paid in this article.
First – What are real estate taxes in Turkey? And what are its types?
Real estate taxes in Turkey refer to the financial amounts imposed by the government as a tax on owning property on Turkish lands, with a specific value paid to the Turkish tax authority. The types of property taxes in Turkey are as follows:
Monthly real estate taxes
These are monthly payments, called ‘aidat’ (service charges), paid by property owners in return for the daily services provided within the complexes.
The value of ‘aidat’ in Turkey is determined by the property’s size and fees vary from one residential area to another based on the level of luxury.
Properties and homes in regular independent buildings also require payment of taxes for cleaning and elevator services, but they are much lower than the dues in complexes.
Annual real estate taxes
The property owner in Turkey pays two types of annual real estate taxes, which are:
1-Property Ownership Tax
Calculated based on the declared value of the property at the time of purchase, determined according to the title deed, and paid annually by the property owner. Turkish citizens who acquire citizenship through the purchase of property in Turkey are exempt from this tax, but it is mandatory for foreigners.
2- Earthquake Insurance for Real Estate
Real estate owners pay an annual amount to insure their properties against earthquakes, and this insurance comes in two types: mandatory and optional, depending on the type of property and its contents.
One-time property taxes
There is a type of property tax in Turkey that is paid only once, and it is:
Meter Opening Fees
Property owners are asked to pay subscription fees for various services such as electricity, water, and gas.
However, if the owner wishes to rent out the property, they can request to close all subscriptions in their name and submit a new request to open them in the name of the tenant, and this is the common practice in Turkey.
Property Registration Tax
This tax is imposed when the property ownership document is registered in the Turkish Land Registry, and it is equal to 4% of the declared value of the property at the time of purchase, divided equally between the buyer and the seller.
Usually, the buyer bears the property registration tax unless otherwise agreed, and its value is estimated at least 2%.
Similarly, any transfer of property ownership in the Republic of Turkey requires payment of the tax. This also happens when ownership is transferred from a deceased person to their heirs, as they pay inheritance tax as part of the property transfer process.
Second – What is the real estate profits tax in Turkey?
It is a necessary tax imposed when selling any property before it has been owned for 5 years, according to Article 80 of the Income Tax Law in Turkey.
The profit is calculated based on the difference between the declared value of the property during the sale and the original value of the property at the time of purchase. No tax will be levied if the profits do not exceed 6,800 Turkish Lira.
If the profit value exceeds 40,000 Turkish Lira, the tax value reaches 35%. Property profit tax will not be calculated if 5 years have passed since the purchase, which means that a larger profit margin can be guaranteed.
Third – How are real estate taxes paid in Turkey?
It is necessary when paying property taxes in Turkey that owners open bank accounts to pay all their periodic taxes. To avoid confusion, we advise you to consult a trusted financial advisor to help you understand what you owe and what you are entitled to.
In conclusion
This article addressed an important question for many investors and property owners about real estate taxes in Turkey, their types, and how to pay them. Contact us today to learn about the most important real estate investment opportunities in Turkey. We are happy to answer all your inquiries accurately.
Edited by: Istanbul Experts©
Sources: Income Tax Law (Official Gazette) + Presidency of the Republic of Turkey website (Regulatory Information System)
