Property Tax in Turkey - Assisting foreign Investors

Property Tax in Turkey

Updated on Thursday 15th July 2021

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Property Tax in Turkey.jpgIncome from renting a property in Turkey is subject to taxation in this country. And those who buy a property, whether they are foreigners or not, must consider paying the required taxes. The legislation on taxes imposed in Turkey can be explained in detail by one of our Turkish lawyers. Our specialists can also provide the necessary legal advice for those who want to invest in Turkey and open various businesses.

What are the annual property taxes in Turkey?

The property tax in Turkey varies between 0.1% and 0.6% rate, depending on the type of property, but also on the city where it is located. Thus, a tax of 0.2% rate is imposed for ordinary properties such as apartments or buildings near large cities. Regarding the properties owned in big municipalities, the property tax rate is set at 0.4% per year. Residences in large cities are subject to a property tax in Turkey of 0.2% rate per year, while those in the surrounding area are taxed at a rate of 0.1%.
Commercial properties in Turkey are taxed at 0.4% rate, while a 0.6% tax rate is applied to land. We remind you that these rates are calculated according to the price of the property.

VAT applied to the purchase of a property in Turkey

The acquisition of properties in Turkey cannot be done without paying the VAT, with few exceptions. Thus, an 18% VAT is imposed on commercial properties, but this tax varies when we talk about residential properties. Here are two examples in this case:
  •  VAT for apartments with an area of more than 150 sq. M is 18% rate.
  •  VAT for apartments with an area of less than 150 sq. M is 1% rate.
It is important to note that rented properties are exempt from VAT in Turkey. Individuals who sell their properties have the same benefit, but the situation changes in the case of real estate agencies if the sale and purchase are made with their help. Here, the VAT is set at 1% rate.
We invite you to talk to our lawyers in Turkey and find out all the details about the taxes imposed in the real estate field. We offer the necessary legal support to those who want to open a business in the real estate sector in Turkey.

How do I buy a property in Turkey?

The Land Registry Law was revised a couple of times in recent years. The legislation regarding the acquisition of properties in Turkey stipulates that around 183 nationalities can buy houses and lands in this country, without constraints. Here is in short lines how you can buy a property in Turkey:
  • The Turkish Land Register Office is the institution in charge of the registration of properties. An earthquake insurance is imposed when buying a commercial property in Turkey. A legal representative can take care of such aspects.
  • A pre-sale approval is required for property purchase in Turkey, and it is issued by the Land Registry Office.
  • Foreigners intending to buy land in Turkey must obtain the approval from the Turkish Council of Ministers.
One of our lawyers in Turkey can act on your behalf with a power of attorney for property purchase. Moreover, our expert can tell you extra details about the property tax in Turkey and the rates imposed for different types of houses, residences, or lands.

Investing in Turkey

Turkey is a business destination with a lot of potential and is highly appreciated by international entrepreneurs. Advantages such as an experienced workforce, an optimal taxation system, a diversified market, and interesting financial incentives do nothing but largely support the business environment in Turkey and provide the optimal climate for the development of any type of business. Here are some statistics that outline Turkey's economic direction:
  1. In terms of total FDIs, Turkey registered around USD 165 billion in 2019.
  2. The simplified business conditions ranked Turkey 33rd out of 190 worldwide economies, according to the 2020 Doing Business report issued by the World Bank.
  3. Most of the FDIs, around 60%, are absorbed by prolific sectors like energy, finance, and manufacturing.
  4. The Netherlands, Qatar, and USA are the main investors in Turkey.
Interested in more details about the property tax in Turkey? We suggest you address your inquiries to one of our Turkish lawyers with experience in the tax field, and contact us right away. International investors can benefit from our support and legal assistance in a wide range of business-related aspects.