Foreign nationals are taxed in Turkey on income obtained from renting property in Turkey and are liable to a number of other property related taxes outlined below. The tax year in Turkey is the calendar year.

Turkey has many double taxation agreement with different countries around the world. If there is a double taxation agreement (DTA) between your country and The Republic of Turkey, for the avoidance of double taxation, and the prevention of fiscal evasion with respect to taxes on income and capital gains, then you only pay tax in Turkey, you need proof of payment, so you don't have to declare and pay the tax, when you transfer the money back to your country.

 

REAL ESTATE CAPITAL GAIN TAX

 

Real Estate Capital Gains Tax will have to be paid if you sell your property within 5 years of  purchase.

If you have taken out a mortgage to finance your property, the interest payments and other expenses will be included in the value of the property.

The tax is calculated by:

  • Adding onto the purchase price of the property, the annual inflation cost . This cost is then deducted from the sale price of your property.
  • looking at the balance, if this is higher than the Government allowance declared each year.

 

Income Tax Allowance Exemptions

Year Allowance amount
2020 18.000 TL
2019 14.800 TL
2018 12.000 TL
2017 11.000 TL
2016 11.000 TL

 

Example:

January 2017 Purchase Price 200.000 TL
January 2018 Selling Price 270.000 TL
Inflation Added 230.931 TL
Selling Price 270.000 TL
Difference Between Value/Selling 39.069 TL
Allowance 2.000 TL
After Allowance 27.069 TL
Tax Payable 4.473 TL

 

 

January 2017 Purchase Price 200.000 TL
January 2019 Selling Price 320.000 TL
Inflation Added 265.931 TL
Selling Price 320.000 TL
Difference Between Value/Selling 54.069 TL
Allowance 14.800 TL
After Allowance 27.069 TL
Tax Payable 4.673 TL

 

 

January 2017 Purchase Price 200.000 TL
January 2020 Selling Price 380.000 TL
Inflation Added 308.614 TL
Selling Price 380.000 TL
Difference Between Value/Selling 71.386 TL
Allowance 18.000 TL
After Allowance 53.386 TL
Tax Payable 10.772 TL

 

 

CALCULATING THE INCOME TAX

 

In 2020 earnings above 6.600 TL rental income, will declare and pay income tax

Earnings above 6.600

When you earn more than 6.600 TL from your residential property first this 6.600 TL allowance  will be deducted, the expenses will be deducted up to %15, the balance will be subject to income tax

 

2020 INCOME TAX RATES

 

Up to 22.000 TL

%15

3,300 TL For   22.000 TL of 49,000 TL, EXCESS

%20

8,700 TL For   49,000  of 120.000TL ,  EXCESS

%27

27,870 TL For   120.000 TL OF 600.000 TL ,EXCESS

%35

ABOVE 600.000

%40

 

 

 

 

 

 

 

Example

Real estate income

Income

   35.000 

   70.000 

   105.000 

Allowance 2020)

     6.600 

     6.600 

        6.600 

Expenses

     4.260 

     9.510 

     14.760 

Amont Subject to Tax

   24.140 

   53.890 

     83.640 

Tax payable

     3.728 

   10.020 

     18.052 

 

 

LOCAL PROPERTY TAX

 

Local property tax is payable in two equal instalments, the first in May and the second in November. You have to contact your local municipality (Belediye) for further information and payment options. Tax is calculated based on the value of the property and is subject to thresholds set by the tax authorities as follows:

For real estate located outside of a metropolitan municipality area: Residences 0.1%

 

 

 

 

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