When you purchase property in Turkey, you must pay real estate tax as you would in any country. Fortunately, real estate taxes in Turkey are generally lower than in many other countries.

Learn more with Skyline Real Estate about the types of real estate taxes imposed by the Turkish government. We will detail each of the ten types of taxes and conclude our article by discussing the main benefits of owning property in Turkey.

We hope you find our article informative and useful.

Types of Real Estate Taxes in Turkey

Before purchasing property in Turkey, it's essential to understand all the details about the related taxes, whether you are a foreigner or a Turkish citizen. The taxes imposed on property purchases apply equally to both Turkish and foreign buyers.

Since the Turkish government aims to attract investors and offers numerous incentives, it reduces the tax burden to range between 5% and 6% of the property's value, compared to 10% to 20% in other countries.

Here are the main types of real estate taxes in Turkey:

Title Deed Transfer Tax (Tapu Devir Vergisi)

This tax is paid once when conducting the title deed transaction at the General Directorate of Land Registry and the Land Registry Office. Both the buyer and seller are required to pay 2% of the property's value.

While companies follow this rule strictly, it is common in Turkey for the buyer to cover the entire transfer tax, so it’s best to agree on this tax during price negotiations.

Rental Income Tax (Emlak Kira Geliri Vergisi)

This tax applies when renting out property in Turkey and depends on the rental income. Property owners must declare their income to the tax office to determine the tax amount, which is calculated based on annual rental prices.

The annual tax rate is calculated every January and announced by the government. Notably, if the property is residential, the tenant does not pay any stoppage tax, so the property owner covers the full tax amount.

Capital Gains Tax (Gayrimenkul Değer Artışı Vergisi)

If you sell the property within the first five years of purchase, you must pay capital gains tax on the profits to the tax office. However, if you sell after five years of ownership, individuals are exempt from this tax, although companies remain obligated to pay it.

The tax rate is 15% on the profit earned after accounting for annual inflation, as inflation reduces the value of money, making the tax net of inflation.

Annual Property Tax (Yıllık Gayrimenkul Vergisi)

This tax is paid annually to the municipality where the property is located.

Inheritance Tax (Miras Vergisi)

When inheriting property in Turkey, you must pay inheritance tax, which depends on the value of the inheritance as follows:

• Up to 160,000 TL: 1%
• Between 160,000 TL and 510,000 TL: 3%
• Between 510,000 TL and 1,280,000 TL: 5%
• Between 1,280,000 TL and 2,780,000 TL: 7%
• Above 2,780,000 TL: 10%

Gift Tax (Hediye Gayrimenkul Vergisi)

When receiving property in Turkey as a gift, you must pay gift tax. If the gift is from a family member such as a spouse or parents, the tax rate is reduced by 50%.

The tax rates based on the property’s value are:

• Up to 160,000 TL: 10%
• Between 160,000 TL and 510,000 TL: 15%
• Between 510,000 TL and 1,280,000 TL: 20%
• Between 1,280,000 TL and 2,780,000 TL: 25%
• Above 2,780,000 TL: 30%

Value-Added Tax (Katma Değer Vergisi)

Value-Added Tax (VAT) is payable if the property is owned by a company. If the owner is an individual, they do not pay VAT because the initial buyer has already paid it.

To calculate VAT, we need to know the fair value of the land:

• Fair Market Value: The market value per square meter, determined by an evaluation committee that meets every four years to set land values street by street.
• Location-Based Fair Value: Based on proximity to banks, public transportation, shopping centers, etc.

Mandatory Earthquake and Natural Disaster Insurance

This insurance is compulsory in Turkey, unlike general insurance. It is calculated based on the property's area, with each square meter costing approximately 2 USD.

Monthly Fees in Residential Complexes

Monthly taxes are imposed on residents of housing complexes under the name of returns, which are fees for services provided by the complex such as pools, gyms, maintenance, playgrounds, and gardens.

The amount varies based on the apartment’s area, typically ranging from 2 to 4 TL per square meter, and depends on the quality and level of services offered.

Electricity and Water Fees

These are deposits paid when opening electricity and water meters for the first time, refundable upon closing these meters when selling the apartment or property in the future.

Monthly bills are calculated based on consumption and usage, payable at designated centers or via bank accounts.

Benefits of Buying Property in Turkey

While we’ve outlined the taxes you need to pay for owning property in Turkey, here are the benefits you’ll enjoy:

• Obtaining a residence permit.
• Ability to apply for Turkish citizenship if the property's value is 250,000 USD.
• Gaining a powerful Turkish passport.
• Simplifying living in Turkey.
• Earning a profitable investment return by renting the property.
• Relatively low living costs compared to countries with similar living standards and robust infrastructure.

This concludes Skyline Real Estate's article on real estate taxes in Turkey, covering all types of taxes and fees you need to pay when owning property in Turkey, along with the key benefits you’ll enjoy.