Guide to Property Taxes in Turkey
Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | |||
Nonresidents are liable to pay tax on their Turkish-sourced income. Married couples are taxed separately on all sources of income.
Income Tax
Turkey taxes its residents on their global income, while non-residents are only taxed on income sourced from Turkey. Income tax is applied to taxable income at progressive rates, following specific deductions and allowances.
| Taxable Income (TRY) | Tax Rate |
| Up to 110,000 TRY (US$3,413) |
15% |
| 110,001 - 230,000 TRY (US$7,135) |
20% |
| 230,001 - (580,000*) 870,000 TRY (US$17,994 | US$26,990) |
27% |
| (580,000*) 870,000 TRY - 3,000,000 TRY (US$93,070) |
35% |
| Over 3,000,000 TRY (US$93,070) |
40% on all income over 3,000,000 TRY |
| Source: Global Property Guide, PWC | |
*Numbers in parentheses represent the rates and brackets applicable to non-employment income.
RENTAL INCOME TAX
Net rental income earned by individuals is subject to income tax at progressive rates. However, if the property is let out as a residence, a certain threshold amount is exempt from taxation. Net rental income can be determined either through the actual deduction method or lump sum method.
- The actual deduction method deducts real expenses (including lighting, heating, water expenses; administrative expenses, insurance expenditures; tax and duties; interest expenses; depreciation costs and repair expenditures) from the gross rental income. 5% of the acquisition cost is also deductible within five years for income arising from the lease of buildings.
- The lump sum method allows taxpayers to deduct 25% of their gross income to arrive at the taxable income. Once the taxpayer has chosen to use the lump sum method, they may not revert to the deduction of actual expenses until after two years.
Capital Gains Ta on Real Estate
Capital gains from the sale of immovable property are exempt from income tax provided that the holding period is longer than five years (four years if the property was acquired before 01 January 2007).
For properties owned less than five years (four years if the property was acquired before 01 January 2007), normal income tax rates apply. Taxable gains are computed by deducting the acquisition costs (subject to inflation adjustment) from the selling price.
Value Added Tax (VAT)
Leasing real estate properties in Turkey is not subject to VAT.
No VAT is chargeable on the sale of real estate by individuals who are not estate agents, except in the case of houses with a total surface area above 150 sq. m, which are subject to 1% VAT.
Corporate Taxation
The standard corporate income tax rate is 25%, levied on income and capital gains earned by companies. This rate applies to companies incorporated in Turkey or foreign companies doing business in Turkey.
Property Buying and Selling Taxes/Costs
| Tax Type | Rate |
| Property Transfer Tax | 4.00% |
| Agent Fee (Buyer) | 3.00% |
| Agent Fee (Seller) | - |
| Legal Fees | 0.50% |
| Notary Fee | 0.10% - 0.20% |
| Roundtrip Cost | 7.60% - 7.70% |
| Source: Global Property Guide, PWC, Deloitte | |
Other Property Taxes
Real estate tax is a municipal tax levied on the value of Turkish real property (land and buildings). The applicable tax rate varies depending on the classification of the property and its location.
- Residential properties are taxed at 0.1% of their value (0.2% if the property is located in a big city).
- Commercial property is taxed at 0.2% (0.4% if located in a big city).
- The tax rate is 0.2% for farms (again, double for big cities).
- The tax rate is 0.3% on vacant land (0.6% in big cities).