Gokce,  Wednesday, 12 November 2014

 

There is no difference between foreigners and Turkish citizens in terms of collecting taxes. Foreigners are also liable to pay taxes for their owned property in Turkey. Here is a summary of taxes and fees you should pay while purchasing a real estate in Turkey:

Deeds (Real Estate) Transfer tax: This tax is paid when the ownership of a property is transferred to someone else. This tax can be paid at the Cadastral Office (Tapu Dairesi). It is charged on properties that are bought from private individuals. It was 3 percent for years, was recently raised to 3.3. and now it is 4. In any case, on the purchase of the property, both the seller and the buyer (contractors) have to pay 4 percent Deeds Transfer Tax. This does not mean 4 percent should be charged from each contractor, but the 4 percent value of the property in total is charged. One must ensure that this amount is calculated on the property’s price.

Registration of your Property Title deed (Tapu Tescili): This is the fee taken by Land Registry Office for finalizing the deed transfer procedure. It registers the title deed in your name (approximately 100 Euros.)

Property tax (Emlak vergisi): There is no difference between foreigners and Turkish citizens in terms of collecting taxes. This is the property tax payable by the buyer upon the transfer of ownership of the property at the Cadastral Office. It is paid annually on the tax values of land and buildings at rates ranging from 0.1 to 0.3 percent. The tax is calculated based on the land and building’s facilities and the size in square meters. The rates are applied twice for properties located in big metropolitan cities. Property tax is paid to local municipalities in two installments at banks, by check, cash or online.

VAT(Value Added Tax): If you are buying a brand new house from a construction company, you need to know how much value-added tax (VAT) you are paying. The level of VAT should be taken into consideration in terms of a VAT percentage with regards to a commercial delivery of a residential property. If a property’s net area is up to 150 square meters, then it is subjected to 1 percent VAT; if it is bigger than it is subjected to 18 percent VAT.

Belledier Tax: This is for the property to be registered and map referenced.

Government Tax: This is the administration cost to the government for military checks. Military checks are made for the property in order to determine whether it is within the military restricted zone or not.

If you decide that you want to sell your property in Turkey, you have to pay tax on the sale of the property. If you buy and sell a house within the 5 years period, you are subject to pay this tax called the “Capital Gains Tax”. Let’s say you bought a house and within this timeframe (less than 5 years) your house gained value. When you sell your property to make profit, the Turkish state wants to cut taxes on your gain. Per the regulations of 2007, Capital Gains Tax is not cut for the properties that were bought before 2007 and sold after 5 years, which is 2012.

Let’s explain this with an example. For instance you bought a house in 2006 which costs 200 thousand Turkish Liras. The house gained value within time and you sold it for 750 thousand Turkish Liras in 2011. In this case, you do not pay the Capital Gains Tax. If you buy a brand new home you have one year from the date on your title deed in which you can sell your home without being subject to paying taxes. After this one year period, you have to pay taxes as explained above (the five year rule).

One important note to make here is that: if you buy a property in Turkey through a business which you run in Turkey, you won’t be subject to Capital Gains Tax as it will be considered as a part of your business in Turkey.