The Rate of Increase in Real Estate Tax in Türkiye

01/12/2023 Tax & Legal 301

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The rate of increase in property tax has been announced, which concerns millions of property owners in Turkey . The increase for this year was 18.1% based on the revaluation rate.

An 18.1% increase in property tax

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After taking half the reassessment rate of 36.2%, the property tax increase for 2022 was set at 18.1%. Accordingly, every building within the borders of Turkey that has the status of a residence and whose value exceeds 6 million and 173 thousand will be subject to the specified housing tax.

The lower and upper bounds for residential property values, which form the basis of tax rates, were also increased by half the new year's revaluation rate.

Taxes and exclusions on real estate capital income “rental income”

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The buildings, which generated 7 million TL in revenue during a calendar year through leasing, are exempt from income tax. The exception cannot be availed if revenue exceeds this limit. The amount of exemption applied to 2022 income has been set at 9,500 Turkish liras.

Inheritance and gift tax

As of 01.01.2022, the exemption amounts contained in subparagraphs (b), (d) and (e) of Article IV of the Inheritance and Gift Tax Law are; Including adoptions, 455,635 TL in inheritance shares fall on both children and spouse (in the absence of offspring, the exemption amount becomes 911,830 TL on the husband’s inheritance share).

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10 thousand 491 TL for free transfers, 10 thousand 491 TL will be taken into account in the bonuses won in competitions, etc.

On the other hand, the tax tariff basis amounts included in Article 16 of the Inheritance and Gift Tax Law are determined by increasing them at the revaluation rate (36.20 percent) as of 1/1/2022. Therefore, inheritance and gift tax will be calculated according to the following tariff in case of inheritance or free transfers from 1/1/2022.

Property tax or real estate tax

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In the second paragraph of Article 49 of Law No. 4/1191319, it was decided that the value of the tax will be taken into account every year starting from the year following the beginning of the tax liability, by increasing the value of the tax over the previous year by half the reassessment rate specified for the same year in accordance with the provisions of the Tax Procedures Law. .

The amount included in Article 42 of Law No. 1319 to be implemented in 2022 has been increased by 18.10%, which is half of the revaluation rate set for 2021 (36.20 / 2 =). It was determined as 6 million 173 thousand Turkish liras as the value of the taxable property.

The minimum and maximum values of residential real estate, which are the basis of the tax rates in the second paragraph of Article 44 of Law No. 1319 scheduled to be implemented in 2022, are half of the values of 2021. (36.20 / 2 =) % of the revaluation rate set for 2021. i.e. Increasing it by 18.10.

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When the value of the property is between 6 million and 173 thousand Turkish liras and 9 million and 260 thousand Turkish liras (including this amount), the property tax is (3 per thousand).

Between 9 million 260 thousand Turkish liras and 12 million 347 thousand Turkish liras (6 per thousand).

As for those who have more than 12 million and 347 thousand Turkish liras, the tax is 27 thousand 783 Turkish liras (10 per thousand).

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How to calculate property tax 2022?

The stated values for 2022 have been increased to 18.10 percent, which represents half the revaluation rate (36.20 percent) set for this year. Therefore, among the residential properties located within the borders of Turkey, those whose construction tax value exceeds 6 million and 173 thousand liras will be subject to a housing tax whose value is determined.

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When are property tax payments due in 2022?

The estate tax, which was first introduced in 1986, can be paid each year in one or two payments. Property tax payments are made in March and November of each year.

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What is property tax?

Real estate tax is the tax that must be paid by everyone who owns real estate such as homes, lands, buildings, and lands registered in the land registries.

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Who must pay property tax?

Property tax is paid by those who benefit from the property, such as the property owner and its beneficiary.

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Who is exempt from property tax?

The following are exempt from real estate tax:

They have no income.
Retirees who have no income other than the retirement pension they receive from social security institutions.
ancient warrior.
Disabled.
Children of martyrs.
Widows and orphans.
Unemployed people from property tax.

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How is property tax paid?

Property tax is paid through area municipalities. In case the property is located in another city, payment can be made from all municipalities by PTT transfer or by transferring them to the municipalities' bank account numbers. Property tax can also be paid online. Since the municipality uses the “e-Municipality” system, payment is made online.

Is anyone who owns one home exempt from property tax?

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People who own one residence with a total area of 200 square meters within the borders of Turkey or a share in one residence (including usufruct) can benefit from tax exemption. People with multiple residences are not exempt from taxes, even if they are in the form of equity contributions.