Real estate taxes in Turkey are in kind and are calculated on the buyer or seller or on both and are paid to the Real Estate Tax Department in Turkey when buying a property or transferring its ownership. There are details for these taxes, such as the value of real estate taxes in Turkey, and when they are paid? What are their types, and should they be paid once, annually or monthly ?
Real estate taxes in Turkey 2022 and property tax in Turkey range between 0.1% and 0.6%, depending on :
- property type
- And the city in which it is located.
Real estate taxes in Turkey 2022 in major cities and surrounding cities
A property tax of 0.2% is levied on real estate and ordinary property such as apartments or buildings near large cities.
As for the property and real estate owned in major municipalities, the property tax rate in Turkey and real estate tax in Turkey is 0.4% annually. Residences located in large cities are subject to real estate tax in Turkey at a rate of 0.2% annually, while real estate in the surrounding area is subject to a tax at a rate of 0.1%.
Commercial property tax in Turkey
The value of the tax on commercial real estate in Turkey is estimated at 0.4%, while on land, the tax is applied at a fair rate of 0.6%. Of course, the calculation of these prices is according to the price of the property.
Value Added Tax on the purchase of real estate in Turkey
Buying real estate in Turkey You cannot buy any real estate without paying VAT, and of course there are few exceptions. Accordingly, a value-added tax of 18% is imposed on commercial real estate, and when we talk about residential real estate in Turkey, the tax rate varies, of course. As in the two examples:
- The VAT rate for apartments over 150 square meters is 18%.
- While the VAT rate for apartments of less than 150 square meters is 1%.
It should be noted that rental properties in Turkey are exempt from VAT in Turkey. And individuals who sell their properties enjoy the same benefits, and in the case of real estate agencies, the situation is different if the buying and selling were done with their help, and here the value-added tax was set at a rate of 1%.
The value added tax in Turkey
The value-added tax is a tax imposed at three different rates, 1%, 5%, and 18%, on expenditures, according to the Value Added Tax Law No. 3065 of 1984. This tax is deducted from the final consumers of goods, and is imposed in Turkey according to the necessity of the consumed goods.
Turkey imposes this tax, symbolized by (KDV), on all products sold within Turkey, and includes imposing it on all commercial and industrial activities, entrepreneurship, and even goods imported into Turkey, in addition to goods and services for other activities.
How is VAT calculated in Turkey?
The VAT calculation is as follows: 1.18 x 500 = 590 TL.
By multiplying the price of one product by the tax rate, and thus the final product price can be known after adding the value added tax on it.
For example, we have a vacuum cleaner whose price is 500 Turkish liras, and the tax rate is 18%, so its final price after increasing the tax is 590 Turkish liras.
How do I buy a property in Turkey?
The Land Registry Law has been revised many times in recent years. The statutory law on real estate acquisition in Turkey states that “about 183 nationalities can buy homes and land in this country without restrictions.” Here, in brief, how you can buy a property in Turkey:
- The Turkish Land Registry Office is the institution responsible for real estate registration. Earthquake insurance is required when buying a commercial property in Turkey and the legal representative can take care of these aspects.
- Pre-sale approval is required to buy a property in Turkey, and it is issued by the Land Registry Office.
- Obtaining approval from the Turkish Council of Ministers before purchasing a land in Turkey.
A lawyer for istasya property in Turkey can act on your behalf with a power of attorney to purchase real estate. Moreover, our expert can tell you additional details about property tax in Turkey and the rates charged for different types of houses, dwellings or land.
Types of real estate taxes in Turkey 2022
Real estate taxes in Turkey are classified according to:
1. Real estate title deed tax
It is the first real estate tax and is paid when buying real estate in Turkey. It must be paid when the ownership of the property changes from one person to another. It is paid when the title deeds are registered. The value of this tax is approximately 4% of the declared value, which was agreed upon between the seller and the buyer and paid by both parties equally. But often the buyer bears the responsibility to pay the full value of the tax, so the buyer must know this matter in order to guarantee it for negotiations on the price in general, in the end he will pay the full amount.
2.Annual property tax
When you obtain the documents proving the transfer of ownership of the property to your name, you have become obligated to pay an annual tax imposed by the Turkish state. This tax is paid to the local municipality and its value is 0.003 of the value of the total property, which is called emlak vergi, in exchange for the services provided by the municipality to the residents, as these The tax is imposed on everyone without exception, whether residents or foreigners. There is no difference in taxes imposed on real estate in Turkey, which distinguishes between a foreigner and a citizen.
3.Insurance against earthquakes and natural disasters
This insurance is mandatory on homes throughout Turkey, unlike public property insurance, which is optional and is calculated based on the area of the house per square meter, equivalent to 2 US dollars, and this can be done through a service called DASK provided by most Turkish banks and the fees are paid annually.
4. Monthly taxes within the residential complexes
As the residential complexes provide many services to the residents, apart from places of entertainment such as swimming pools, sports clubs, playgrounds and gardens, in addition to the periodic repairs that they carry out in case of any defect that may occur to the infrastructure of the residential complex in general, therefore, a monthly tax is loaned that the property owner pays, and it is estimated on average. Between 2 to 4 Turkish lira per square meter, and the tax value varies from one complex to another according to the services provided within the residential complex in general.
5. Electricity and water insurance fees for the property
With regard to the monthly electricity and water bills, they are calculated based on the amount of consumption and are paid through points designated for the order or through a bank account
6. Real estate profit tax
When the buyer decides to sell the property before 5 years of ownership, then it falls within the real estate tax department in Turkey, which is imposed on the profit rate. Determining by the state the amounts of profit in varying proportions, increasing and decreasing according to the value, between 15% to 35%, and accordingly the state is paid, and the state does not specify who pays those profits, so it should be noted here also that it is included in the negotiation process on the price, and the advice to investors remains from The deadline for exceeding this tax is to sell the property after 5 years of purchasing the property, so that the investor gets an exemption from paying this tax
How to pay property tax in Turkey
- The real estate investor or real estate owners can pay the property tax in Turkey through the government applications dedicated to this.
- Or you can use a real estate company or real estate brokerage company to pay these taxes.
- Real estate owners in Turkey can open a bank account with a bank in Turkey to facilitate the payment of property tax, and payments are proven via bank receipts.
Some statistics that determine the economic direction of Turkey:
- Turkey recorded about 165 billion US dollars in 2019 of total foreign direct investment.
- Turkey is ranked 33rd out of 190 global economies, according to the Doing Business 2020 report issued by the World Bank.
- Most foreign direct investment, about 60% of it, is absorbed by highly productive sectors such as energy, finance and manufacturing.
- The main investors in Turkey are the Netherlands, Qatar and the United States.
And if you are interested in additional details about the property tax in Turkey, real estate taxes in Turkey 2022, we advise you to inquire from one of the Turkish lawyers at istasya property company with experience in the field of taxation.
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