Comprehensive Guide to Property Taxes in Turkey 2024: Laws, Rates, and Exemptions

Property taxes in Turkey are a fundamental part of the country’s tax system, covering all real estate activities such as buying, selling, and renting. Whether you’re considering buying property in Turkey or already own one, it's crucial to understand the details surrounding property taxes and how they apply in 2024. In this article, we will cover the key types of property taxes in Turkey and the rates applied.

1. Title Deed Transfer Tax (Tapu Harcı)

When you buy property in Turkey, both the buyer and seller are required to pay the title deed transfer tax, known as “Tapu”. This tax is set at 4% of the declared property value and is usually split equally between the buyer and the seller. However, in some cases, the buyer may bear the full tax.

 2. Rental Income Tax

If you own a property and rent it out, you are required to pay rental income tax. This tax is calculated based on the total annual rental income. In 2024, the tax rates range from 15% to 40%, depending on the net rental income received.

 Tax Exemptions:
There are exemptions for property owners with low rental income, allowing them to benefit from deductions on the tax under specific conditions.

 3. Capital Gains Tax

Capital gains tax applies to profits made from selling a property if it is sold within the first five years of ownership. The tax is calculated based on the difference between the purchase price and the selling price after deducting related costs such as maintenance or improvements. The tax rate ranges from 15% to 35%, depending on the profit amount.

 4. Annual Property Tax

One of the key taxes for property owners is the annual property tax. The rate varies depending on the type of property and its location:
For residential properties: the tax ranges from 0.1% to 0.3% of the property’s value.

- For commercial properties: it ranges from 0.2% to 0.6%.

This tax is paid yearly and is collected by local municipalities. It can be paid in two installments annually.

5. Value Added Tax (VAT)

Value Added Tax (VAT) applies to newly built properties in Turkey, ranging from 1% to 18%, depending on the type and location of the property. However, foreigners may be exempt from VAT if they purchase the property for investment or residence purposes, provided they do not sell the property for three years.

6. Tax Exemptions and Incentives for Foreigners

To attract more foreign investors, the Turkish government offers various tax exemptions. Some of the key incentives include:
- Exemption from VAT for foreigners who purchase property for investment or residence, provided they meet certain conditions.
- Capital gains tax reductions if the property is held for a longer period.

7. Tax Law Amendments in 2024

In 2024, the Turkish government introduced several amendments to the tax system aimed at supporting the real estate market and attracting more foreign investors. These amendments include:
- Simplifying and improving the process of paying property taxes.
- Expanding exemptions and tax reliefs for foreign buyers.

Conclusion

In conclusion, property taxes in Turkey 2024 play a significant role in both local and foreign investments. Whether you are a foreign investor or a local resident, it is essential to consult legal and tax advisors to ensure compliance with the current laws and to make the most of available exemptions.