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Wednesday, 19 May 2010

Talk about property tax in Turkey

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Property taxes in Turkey. Yes, it’s another ‘boring-but-vital’ post (see also our guide to visas in Turkey).
We received an email from Charlotte asking the following taxing question:
I’m thinking about buying a property in Kalkan and I’m hoping you can answer a couple of questions:
What property taxes are foreigners buying property in Turkey required to pay? Are these taxes collected by local councils or the Turkish government? Do foreigners and Turkish citizens pay different tax rates or payments? If I eventually want to sell my Kalkan property in the future, will I be taxed?
They’re good questions, and we’ll answer as best we can.


What property taxes are foreigners buying property in Turkey required to pay?
Both the buyer and the seller must pay a levy of 1.5 per cent based on the declared value of the asset, which cannot be less than the threshold determined by authorities. It must be paid before the transfer of property ownership. If you rent out your property you will pay an income tax on your rental income.
The other tax you’ll need to know about is the annual real estate tax for homeowners. The rates for cultivated land, non-residence buildings and residential buildings are 0.1, 0.3, 0.2 and 0.1 per cent respectively. Tax is calculated on the asset’s declared value, and once again, cannot be less than the threshold determined by authorities.
You pay tax in two instalments each year. The new property owner must declare the price paid to the seller to the local authorities by the end of the December in the year they buy the property.

Are these taxes collected by local councils or the Turkish government?
It depends on the type of tax. The sale/purchase tax is paid to the tax office. However, local authorities collect the annual real estate tax.
Do foreigners and Turkish citizens pay different tax rates or payments?
There is absolutely no difference here. Turkish citizens and foreign nationals pay the same rates and taxes.
If I eventually want to sell my Kalkan property in the future, will I be taxed?
If you sell your Kalkan property within five years of purchase, you will have to pay the capital gains tax, which ranges from 15 to 35 per cent of the real value of the house. You will need to declare the value of the property to the title deed office during the property transfer.
If you have any further questions about tax or property in Turkey, please get in touch with one of our team.

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