Income tax on real estate in Turkey

What is income tax:

A tax that is deducted from the net value of income, which is the profits and imports that the individual makes during one year.

What types of income are covered by the tax:

The tax includes all profits that an individual gains from his work in Turkey, such as:

  • Business profits.
  • Agricultural profits.
  • wages.
  • Self-employment profit.
  • Movable and immovable capital revenues.

Who are the individuals required to pay income tax?

Persons obligated to pay income tax fall under two main parts, namely:

1- Individuals who are obligated to pay income tax in full:

  • Residing in Turkey permanently.
  • Residing in Turkey for a period of at least six months without interruption.
  • Turks residing outside the Turkish territory, for the activities and work of their companies and institutions based in Turkey.

2- Individuals who are obligated to pay incomplete income tax:

Individuals residing outside Turkey are considered subject to incomplete tax collection from them, so the tax is deducted only for imports they earn from Turkey.

How is income tax paid and when?

Income tax is shown from the beginning of March until the evening of the twenty-fifth of the same month of each year, and it is paid in two installments, to the tax department, closest to the areas of residence of the taxpayers,  it can also be paid through banks, and the first installment is paid in The period extending to the end of March, the second installment will be paid in the period until the end of July.

Income tax on real estate:

The tax includes everyone who receives income, on the Turkish property of each individual, and it is divided into three categories:

  • Income tax :

The income tax rate increases as the income rises, and rates range from 15% to 35% in general.

It is obligatory to pay income tax on all profits, income earned, employment and rent, persons who are not residing in Turkey or if you run a commercial activity in Turkey, and if the person is an investor and reaps profits from his investment on Turkish lands, but in the case of buying a house In Turkey and renting it, income tax must be paid on the profits that the rent of the house returns to its owner.

How is the imposed tax rate distributed according to income?

The income tax rate ranges between (15% -35%) and is determined according to income groups:

If the per capita income is between 0-10000 Turkish liras, then the tax rate is 15%

If it is between 10001-25000 Turkish liras, the tax rate is 20%.

And in the event that it is between 25001-58000 Turkish liras, the tax rate is 27%

If the income is above 58,000 Turkish liras, the tax rate is 35%.

Are there deductions on income tax?

Certain expenses of the income taxable amount may be subject to deduction, such as maintenance fees, insurance, and property management.

  • Taxes on expenses:

 These taxes include the added value that must be paid on exports and imports, from and to Turkey, if you want to establish a company and import foreign goods and products such as oil, gas, cars, alcohol and tobacco are subject to a consumption tax for the types of luxury products that fall under This category of taxes.

As for buying a house in Turkey, it will be subject to the law of exemption from value added.

  • Taxes on wealth:

In the event that an individual owns a property in Turkey, he must pay a tax on his land and buildings, the rate of this tax usually ranges between 0.1-0.6%, and once the property is determined, it is possible to know the amount to be paid annually.

In the event of buying and selling a property, both the seller and the buyer must pay a tax equivalent to 2.2% of the price of the property and payable only once, when executing the buying and selling process.

What is the income tax policy in Turkey for foreigners:

Foreigners residing in Turkey can use the tax they pay in Turkey instead of the tax that must be paid in their home country, in the event that there is a double tax agreement between the country of origin and Turkey.

How is net rental income determined:

There are two methods for determining net rental income:

  • The first method (actual deduction method):

Where expenses such as electricity, water, maintenance and depreciation are deducted from the total rental income.

  • The second method (lump sum method):

The taxpayer can deduct 25% of his total income, up to the taxable income.

In the event that the total amount method is chosen, it is not possible to change to the actual deduction method until the lapse of two years.

And real estate owners have a personal tax allowance that is deducted from the total rental income.


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