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All You Need To Know About Real Estate Taxes in Turkey

All You Need To Know About Real Estate Taxes in Turkey

All You Need To Know About Real Estate Taxes in Turkey

Tax ... a simple word of 3 letters, but it is a nightmare for any investor in the world, as taxes constitute a large part of any investment in the world, and in the nature of the case for each investment its inevitable tax, in light of this we will inform you through the following article on the types of tax Real estate taxes in Turkey in a short and fast way ... An enjoyable read. 


What are the types of real estate taxes in Turkey? 

There are four types of real estate tax in Turkey: 

1 - Transfer Tax 
2 - Value Added Tax 
3-  Monthly tax for residential complexes 
4 - Annual tax 

Below we will explain each of them clearly and briefly:


Transfer Tax: 

It is the most prominent and famous tax in real estate transactions within Turkish territory. This tax is paid to officially register the property in the Turkish Tapu Department and transfer it from the name of the old owner to the name of the new owner, and its value is calculated on the basis of 3.9% of the value of the property registered in the title deed, and this type of Taxes are applicable to all real estate, regardless of its type or size. 

In 2019, it was reduced by the Turkish government in half, becoming only 2% instead of 3.9%, and soon the tax reduction ended with the end of 2019 and the tax returned to its usual value. 

This tax is imposed on the investor, of course, but some construction companies share the amount with investors to encourage them to own property in their own residential complexes, or it is canceled in some cases if the land on which the housing project is built belongs to the Turkish government. 


Value added tax: 

According to the real estate ownership law in Turkey, value-added tax is imposed on real estate sales for each property with an area of ​​more than 150 square meters, while this tax is not applied to real estate with an area smaller than that. 

Its value ranges from 1% to 18%, depending on the location of the property and the construction company, whether governmental or private, and other factors on the basis of which the Turkish government determines the value of the tax for each property. 

This tax is not imposed on resale properties in Turkey, but only on new properties sold by construction companies for the first time. 

The tax is imposed on foreigners and Turkish citizens alike, but what distinguishes foreign investors is that they have the privilege of obtaining exemption from value-added tax



Monthly tax in residential complexes 

Living between the walls of luxury residential complexes has a tax as well, but it is not a tax in the actual sense as some believe or describe. In fact, it is called the monthly returns of the residential complexes, which are material amounts collected monthly from the residents of the apartment complexes in exchange for the services provided by the complex: 

as Security services 
and Cleaning 
and Car garages 
And other amenities and luxury, such as swimming pools 
And Sauna rooms - Turkish baths 
and Sports clubs 
And the jacuzzi...etc.


These monthly returns are calculated according to the management of the complex and increase according to the size of the property. The larger the property, the higher its monthly returns. The owner of the property bears these costs even if he is not using the property or if he is residing outside Turkey 

That is why investors resort to renting their properties when they are not in Turkey in order to remove the monthly returns from themselves, even if the amount is small, as the monthly returns are paid by the tenant due to his stability in the property and the possibility of using various recreational facilities throughout the month. 


Annual tax for real estate in Turkey:

This tax is almost forgotten or does not come to mind because of its low and simple costs, as the annual tax is imposed by the municipality on all real estate owners in Turkey in exchange for the services provided by the municipality to the region 

The municipal tax is estimated at 0.03% of the property value and is paid once every year. 

Speaking of municipal taxes, we can mention the earthquake insurance tax, or what is known as Dask vergi, which is also paid only once per year in return for insurance of the property against earthquakes and natural disasters, and its value is calculated at 2 dollars per square meter of the property.