All Turkish property taxes can be divided into three groups:
- so-called stamp duty (when a real estate object changes ownership),
- annual real estate tax,
- tax on income from property.
The stamp tax is to be paid when you register a title deed (Tapu). Its rate is 4,4 percent from the cadastral cost of the property. This cost is usually lower than the real one. The seller and the buyer should pay together an equal amount of the tax. But in reality the tax is usually paid by the buyer because it is very often a part of purchase negotiation.
Annual real state tax is a kind of council taxes which are paid in the UK, the USA other countries. It can be from 0,6 to one percent of the property cost. You are to pay this tax twice a year: in May and in November. There are regions where you have to pay real estate tax at a double rate (for example, Antalya, Istanbul, Izmir, Ankara, etc).
Tax on income from property
Income from real estate can be of two types. The first one is when you gain profit from renting your property out in Turkey. In this case you will pay a rental income tax. The tax rates start from 15 percent and go up to 35 percent depending on the income amount. The bigger is the amount, the bigger is the tax rate.
The second type is when you make profit from selling your Turkish real estate. In this case you will have to pay a capital gain tax which is the difference between the declared (which is mentioned in Tapu) cost of property on sale and the declared cost of property on purchase. As well as the rental income tax rate, the capital gain tax rate depends on the income amount. There are several cases when you do not have to pay this tax. If you have owned the real estate less than five years, the capital gains tax drops to nothing. And capital gains less than 6000 TRY are also not taxable.