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Tax and Turkish Real Estate

The only requirement to be an income taxpayer in Turkey is to reside in Turkey. Whether you are a Turkish citizen or a foreign citizen, if you reside within the borders of turkey, you are considered an income taxpayer.

If grassroots investors obtain a residence permit in Turkey, it is necessary to express that they are considered Turkish citizens. In this case, it is also necessary that they declare income tax. In addition to this situation, it should be known that those who have been in Turkey for more than 6 months are also considered income taxpayers. Non-payment of such taxes, which is an obligation in the Turkish legal system, is reciprocated by criminal proceedings.

It is worth mentioning that while people who are in Turkey and work in Turkey are required to pay income tax, the situation with Real Estate is slightly different. In this type of tax, a person does not have to reside in Turkey. More clearly, anyone who has real estate in Turkey must pay taxes for this real estate. However real estate taxes are considerably low compared to European countries. It is important for foreign investors to understand how real estate taxes are imposed.  

There are 3 types of taxes that foreigners who own real estate in Turkey must pay. Let’s take a closer look at what these taxes are.

Stamp Duty

Stamp duty is a one-off tax paid when the sale or transfer of real estate is carried out. Therefore, stamp duty is paid only during the purchase of the property. It is a tax paid during the registration of title deeds. This tax is equivalent to 4% of the amount of the real estate purchased. Some sellers tend to pay Stamp duty equally with the buyer, i.e. each pay 2%. However other sellers might choose for the buyer to pay the full amount. Therefore it is beneficial to have an agreement before the purchase process.

Annual Property Tax

It is a tax that people who buy real estate by investing in Turkey pay at rates ranging from 0.6% to 1% of the real estate value. This tax is paid annually. 

Income from Real Estate

It is a tax that people who earn profit from their real estate in Turkey must pay in exchange for this income. This includes income from sale of real estate or renting of real estate. Tax rates related to Income from real estate vary from 15% to 30%.

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