When buying a home abroad, property taxes and consequences can be complex. Because apart from the taxes you pay when buying a house, you may have to pay other taxes such as annual taxes and VAT.
We tell you the taxes you have to pay when buying apartments in Turkey.
Purchase Tax
One of the most important documents to be obtained when buying real estate in Turkey is the title deed because the TAPU is the legal document showing the transfer of the property and showing the owner of the property. After your purchase is completed, you should request a TAPU from the Land Registry and Cadastre Office. The price you will pay for TAPU in Turkey is 4% of the price of the property you buy. In general, this amount is divided into 2% each. For example, taxes are usually split in half when you buy a new flat in Turkey. However, if you are purchasing a resale property from an individual, the full 4% must be paid by the buyer.
All property buyers should know the title deed process well, but this process is especially important for foreigners who want to qualify for Turkish citizenship through investment.
VAT (Value Added Tax)
All commercial, industrial, and professional transactions in Turkey are subject to VAT. But there are a few exceptions to this general rule:
If the current owner of the property is not engaged in any commercial activity, it is not subject to VAT. Another exception applies if the current owner has owned the property for more than two years and does not work in the real estate business sector.
The VAT rate in Turkey is 18%. If the property you buy is commercial property and does not fall under one of the above exclusions, you must pay this percentage. This rate is 18% for apartments larger than 150 square meters and 1% for apartments smaller than 150 square meters.
Stamp Duty
You must pay stamp duty when creating the contract of sale. The rate of this tax is 0,948% of the value specified in the contract.
Annual Property Tax
Annual tax is the tax you have to pay regularly if you own property in Turkey. The annual property tax in Turkey is determined in two ways: the size of the city and the type of property. As it can be understood from here, the cities in the country are divided into two as big and small. For example, Antalya is a big city and the annual tax amount of an apartment in Antalya is 0.2% of its value. Annual tax rates are given in the table below.
| Property Type | Big Cities | Smal Cities |
| Residential Properties | 0.2% | 0.1% |
| Commercial Properties | 0.4% | 0.2% |
| Farms | 0.2% | 0.1% |
| Lands | 0.6% | 0.3% |
Income Tax
If you are renting your property in Turkey, you will have to pay income tax. In fact, when you decide to sell your home in Turkey, the same rules apply as in other countries. However, after the property has completed 5 years, income tax will not be paid.
Gift Tax or Inheritance Tax
If you acquire property in Turkey by inheritance or donation, you are expected to pay some taxes. These tax rates can vary between 1% and 30%. In addition, you can pay the property tax in Turkey in two installments for a period not exceeding 3 years.
Tax Rates According to Rental Income in 2022
- If the rental income is up to 32.000 ₺, the tax rate is 15%.
- If rental income is up to ₺70,000, tax is ₺4,800 for income of ₺32,000 and 20% for the remaining amount.
- If rental income is up to ₺170,000, tax is ₺12,400 for ₺70,000 income and 27% for the remaining amount.
- If the rental income is up to 880.000 ₺, tax is 39.400 ₺ for 170.000 ₺ income and 35% for the remaining amount.
- If the rental income is 880.000 ₺ and above, the tax for the 880.000 ₺ income is 287,000 ₺ and 40% for the remaining amount.
Property Purchase Process in Turkey
In recent years, useful revisions have been made to the Land Registry Law in Turkey. According to the regulated rules, foreigners from around 183 different countries can buy houses and land in Turkey without any restrictions. Here are some tips for buying property in Turkey:
- The institution responsible for the registration of real estate in Turkey is the Land Registry and Cadastre Directorate. If you are considering buying a commercial property in Turkey, you should also have earthquake insurance.
- Pre-sales approval is required for the purchase of a real estate in Turkey. This approval is given by the Land Registry Office.
- In addition, the approval of the Council of Ministers is required for foreigners to purchase land in Turkey.
Don’t Pay Double Taxes
If you are considering buying a property in another country, you should learn the basics and know how to adapt them to your own situation. If you spend less than six months of a year in Turkey, you will only be responsible for income generated within the borders of Turkey, such as rental income from real estate. However, the important thing, in this case, is that you may also be subject to taxation in the country where you are a tax resident. There is a long list of double taxation treaties in Turkey to protect you from this situation. For example, if you reside in the UK, China, USA, Germany, France, Qatar, or Iran, you can deduct the tax you pay in Turkey from your local tax invoice. That way you don’t pay taxes twice.
On the other hand, if you exceed your six-month limit in one year, your international income will be subject to Turkish tax as soon as you become a resident.
Conclusion
Wouldn’t you like to be enjoying the sea, the beach, and the sun in your apartment in Antalya right now without dealing with tax penalties? Tolerance Homes real estate agent allows you to know all the details including taxes when buying a property in Turkey. Contact us, to get through your process of buying a property in Turkey without any problems.
