Real estate taxes in Turkey

Briefly about the main thing

Warm climate, magnificent sea, high standard of living, excellent service and affordable prices - this is what traditionally attracts Russian real estate buyers in the Turkish real estate market. Buying a home here is simple and transparent and allows a foreign owner to apply for a residence permit. As for taxes, they are quite affordable for a buyer with any budget.

Despite the fact that recently there has been a tense political situation between our states, immediately after the resumption of flights, the tourist flow from Russia to Turkey has skyrocketed: for example, in March 2017, the number of Russians vacationing in Antalya “skyrocketed” by 816% ! The increase in demand will be positively reflected by the fact that now Russians can stay in Turkey without visas for 90 days. The improving situation in the tourism sector is almost always evidence of positive changes in the real estate market.

On February 23, 2017, the Turkish authorities canceled VAT on the purchase of residential real estate for foreign citizens, hoping that this will help to restore the sector. Under the new law, foreign citizens will be exempt from VAT on the purchase of their first office or home in Turkey. Payment for objects must be made in foreign currency - and they cannot be sold within a year from the date of purchase. “The abolition of VAT for foreigners purchasing housing is a very wise decision. It will significantly stimulate the sector, ”says Nazmi Durbakayim, head of the Istanbul Developers Association.

Making a deal

To conclude a transaction for the sale and purchase of real estate in Turkey, it is necessary to attract a professional realtor specializing in a specific market - and knowing all its subtleties. This will help to avoid any mistakes and shortcomings, save the buyer both time and money.

The main and only document certifying the ownership of real estate in Turkey is called TAPU. It prescribes the minimum cadastral value of the object, data on registration in the register of the cadastral administration, information on the location, the date of the last sale / registration of Tapu, the names of the previous and new owner or owners. The area of the object is not indicated in the TAPU: these data are contained in the data sheet (iskan).

Tax rates

The tax on the acquisition of real estate in Turkey from 2017 has been temporarily reduced to 3% and will be valid until September 30, 2017 inclusive. Whether this benefit will be extended for buyers is not yet known for certain, experts say. The standard tax rate for the purchase of real estate in Turkey is 4%. Buyers should have in mind that all taxes are calculated only on the cadastral value! According to the law, this tax is paid in equal shares by the buyer and the seller before the transfer of ownership. However, in practice, in most cases, the real estate purchase tax is paid in full by the buyer. The tax is levied on the value of the object indicated in the TAPU and is paid in a lump sum at the state bank in Turkish liras upon receipt of the TAPU.

The annual property tax in Turkey is low and amounts to 0.1 and 0.2% of the value for residential property and land without a building permit, 0.2 and 0.4% for commercial properties, 0.3 and 0.6% for land plots with a building permit. When calculating the tax amount, only the cadastral value of the property is used! If the owner owns the house, then he only pays the tax on residential real estate: he does not need to pay land tax in this case.

Buyers of real estate in Turkey should keep in mind that the lower of the indicated rates apply to small towns, and the larger ones apply to large ones, which include Adana, Ankara, Antalya, Bursa, Diyarbakir, Erzurum, Eskisehir, Gaziantep, Icel, Istanbul, Izmir, Kayseri , Kocaeli, Konya, Samsun.

Rental tax is calculated based on the amount of income and ranges from 15% to 35%. It is not charged if the return on residential property does not exceed TRY 3800 (about € 973), and from commercial property - TRY 30,000 (€ 7685) per year. A minimum rate of 15% will apply in cases where the amount received from the rental of residential property is no more than TRY 13,000 (€ 3330). The maximum rate (35%) applies to cases where the rent brought the owner an annual income of more than TRY 110,000 (€ 28,175). For legal entities, the tax is always calculated at the rate of 20%.

Real estate sales tax is not levied on individuals if they have owned real estate in the country for more than five years. If the decision to sell was made earlier, then progressive tax is levied on the amount that is the difference between the purchase and sale costs. Amounts up to TRY 11,000 (€ 2,818) are tax deductible. A 15% rate applies to amounts up to TRY 13,000 (€ 3330), 20% from TRY 13,000 to TRY 30,000 (€ 7685), 27% from TRY 30,000 to TRY 70,000 (€ 18,000). 35% will have to be paid to everyone who received income from TRY 70,000 to TRY 110,000 (€ 28,175).

Inheritance and gift tax rates depend on the value of the property being transferred. The tax is calculated on the value of the real estate object registered in the TAPU. If the cost of housing is up to TRY 210,000 (€ 53,800) - 1% for inheritance and 10% for donation; from TRY 210,000 to TRY 500,000 (€ 128,800) - 3% and 15%, respectively; from TRY 500,000 to TRY 1,110 million (€ 128,800) - 5% and 20%; from TRY 1,110 million to TRY 2 million (€ 512,800) - 7% and 25%; TRY 2 million to TRY 3,280 million (€ 840,000) - 10% and 30%.

According to the law on avoidance of double taxation, income received by Russian citizens from real estate in Turkey is taxed only in Turkey.

Additional expenses

When the object for purchase is found and all the conditions for the purchase are agreed, the transaction for the sale and purchase of real estate is registered in the State Land Registry or Registration Chamber of the country. It is recorded by government officials, so the involvement of notaries, lawyers and others will not be required.

• For foreign persons, when registering property rights, the presence of a notarized translator is required. His services will cost TRY 100-150 (€ 25-38).
• For the execution of the transaction, foreigners are charged an official fee of TRY 320 (€ 82);
• The cost of the agency's services, which helps with the registration documents, will be TRY 250-300 (€ 64-77);

• Re-registration of electricity and water meters to a new owner after purchase depends on the type of object (primary or secondary) - and amounts to TRY 39 (€ 10) for water plus TRY 190 (€ 49) for electricity for the "secondary" and TRY 180 (€ 46 ) for water plus TRY 450 (€ 115) for electricity for the "primary". If the apartment does not have a registration certificate, then these amounts will be TRY 300 (€ 77) for water and TRY 650 (€ 167) for electricity.
• Compulsory national earthquake insurance - TRY 100 (€ 25).

Regular maintenance expenses

• Annual tax on garbage collection - up to TRY 90 (€ 23) per year;
• If there is a developed infrastructure in the complex, at least there is a swimming pool in the complex, then the fee will be about € 360 per year. The more infrastructure in the complex, the higher may be the monthly payment for the maintenance of the complex: in Turkey it is called "Aydat";
• Monthly utility bills for the meters are about TRY 200 (€ 51).

The HomesOverseas.ru portal would like to thank Victoria Aryk ( Coastline Keys Real Estate Agency) and Lyudmila Revzina-Kaya ( Alpar Real Estate ) for their help in preparing this article.

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