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What types of tax liabilities do I need to fulfill as a real estate buyer in Turkey?

Can I rent out the property I purchased for my citizenship application in Turkey? What types of taxes do I need to pay for the rental income?

  • UHB International Law office
    March 06, 2020

    "In order to complete the real estate purchase process for citizenship, you need to pay 4% of the title deed fees. In the ongoing process, you’ll have to pay property tax and environment tax annually. By the way, a reservation is made to the land registry with the sale process. After that real estate cannot be transferred within three years due to the acquisition of citizenship rules. However, there is no prohibition to rent your property. Everyone is free to determine the future of their property, as there is no record, unlike the deed. If you rent your property as a natural person, you'll be liable to pay varying income tax every year when you earn rental income that exceeds the amount determined according to tax legislation.

  • Av. Zeynep Ekin Tepeli Legal and Business Consultancy
    March 04, 2020

    There is a tax exemption for foreign people who want to buy real estate in Turkey the first time. They are exemption from value-added tax (VAT) if they do not sell the real estate in one year and if they pay the purchasing cost as foreign currency. If they do not buy a property for the first time in Turkey, they will have to pay VAT. For properties are not more than 150 square meters (net area), the VAT is %1; for those that are more than 150 square meters, the VAT is 18%. Additionally, buyers and sellers will only pay 2% property tax each at the purchasing moment. Renting the property is not obstacle for gaining the citizenship. But you can not sell it for three years. You can rent the real estate after purchasing. VAT will be paid by the tenant if you rent your property. You as a house landlord will have to pay the income tax for a rental year which is calculated according to your net yearly rental income between 15% to 35%. For office leasing, the landlord will not pay income tax since the tenants are taxpayers too.

  • WiklundKurucuk Law Firm
    March 04, 2020

    If you purchase a property in Turkey, sale and purchase tax is 4% percent from the assessed value of the property, and it is generally split in half by the buyer and seller. Once you buy the property you can directly rent out your property without waiting for the completion of the Turkish citizenship application. Once you rent the property, you need to submit a tax declaration if the rental income is more than 6.600 TL which is a tax exemption amount in 2020. If the rental income is more than 6.600 TL then tax declaration for the rental income has to be submitted. The rental income tax rate is between 15% and % 40 depending on the rental income amount. Owners of the properties are obliged to pay property taxes that are paid annually on the tax values of land and buildings at rates ranging from 0.1% to 0.3% and also environmental cleaning Tax.

  • March 05, 2020

    In general, real estate cannot be transferred within three years due to rules on the acquisition of citizenship. A reservation shall be put at the land registry during the sale and purchase. However, if it is transferred within the fourth and fifth years, then you have to pay income tax for the difference between purchase and sale amounts. There is an exemption up to TRL 18,000. If income exceeds TRL 18.000, then the ratio of 15-40% would be applicable depending on the earning. After the fifth year, you are not required to pay the above income tax. You can lease your real estate. If the owner leases the real estate as an apartment, then, any amount exceeding TRL 6.600 shall be subject to income tax on which the above rates between 15-40% shall be applicable. If the owner leases the real estate as a workplace, then any amount exceeding TRL 40,000 shall be subject to income tax on which the above rates between 15-40% shall be applicable. However, the lessee shall pay 20% of the income tax to the tax office on behalf of the owner. The rate for real estate tax is 0.2 % of the real estate's value and is paid each year. The environmental and cleaning tax also applies, which varies between TRL 850 and TRL 5,500, depending on the degrees/levels where the real estate is located. There is a chart for this tax published by the official authority. You also need to pay land registry's fees, which are rated at 1.5 % of the real estate's value shall be paid to the land registry during the sale and purchase.

  • Barlas Law Firm
    March 05, 2020

    Yes, you can. And the tax over the rent income is approximately 1/12 of the yearly rental income.

  • Baris Erkan Celebi
    March 04, 2020

    You can freely rent out your property, even if you purchased it for citizenship purposes. Rental income tax depends on whether the taxpayer is a company or a real person. For companies, corporate income tax is fixed at 22%. For real persons, the income tax range is between 15-40%, depending on the size of their income.