If you’re planning to invest in real estate in Turkey, it’s essential to understand the tax implications of owning property. In this blog, we will take a closer look at the real estate taxes in Turkey and what you need to know.
Property Taxes in Turkey
Property taxes in Turkey are divided into two categories: annual property tax and real estate transfer tax.
- Annual Property Tax: This tax is levied on the property’s value and is payable annually. The amount of tax you pay is based on the assessed value of your property, which the local tax office determines. The tax rate ranges from 0.1% to 0.6% of the estimated value, depending on the property type and location.
- Real Estate Transfer Tax: This tax is levied on the sale or transfer of property and is payable by the buyer. The tax rate is 4% of the sale price or the assessed value, whichever is higher.
Value Added Tax (VAT)
Value Added Tax (VAT) also applies to real estate transactions in Turkey. The VAT rate for new properties is 18%, while the VAT rate for second-hand properties is zero. However, if you’re purchasing a second-hand property from a developer or a company, you may still be subject to VAT.
Capital Gains Tax
If you sell your property in Turkey, you may be subject to capital gains tax. The tax rate is 15% for properties held for less than five years and 0% for properties owned for more than five years.
Inheritance and Gift Tax
If you inherit or receive a gift of property in Turkey, you may be subject to inheritance and gift tax. The tax rate ranges from 1% to 30%, depending on the value of the property and the relationship between the donor and the recipient.
Owning property in Turkey has several tax implications, including annual property tax, real estate transfer tax, VAT, capital gains tax, and inheritance and gift tax. Please understand the different taxes and rates, and consider consulting with a tax professional to ensure they comply with the Turkish tax system. With proper planning and due diligence, you can successfully invest in real estate in Turkey while minimizing your tax liabilities.