The Turkish property market is on the rise, with many foreign investors wanting in on the many investment opportunities the country has to offer.
Before you go ahead and purchase real estate in Turkey it’s important to understand the various Turkey property taxes to ensure you know what you’re getting into.
In this guide you will learn about:
Purchasing Tax: Title Deed Fee
A title deed is perhaps one of the most crucial things to receive when buying property in Turkey. The title deep is referred to as TAPU in Turkey and is a certificate that dictates the transfer of property, specifically stating its rightful owner.
The TAPU can be obtained from the Director of Land Registry and Cadastre upon completing your purchasing transaction.
Since the procedure of obtaining the title deed is critical for all homebuyers, especially for those who want to qualify for the Turkey citizenship by investment scheme, it is important to understand the information provided in it regarding the property you have purchased. You might want to seek assistance from your adviser or assigned attorney to guarantee you have all your details covered and are abiding by all the rules and regulations of the Turkish law and the investor visa scheme.
When buying property in Turkey, you are required to pay Turkey property taxes when you receive a title deed, or “TAPU”. This usually comes at a rate of 4% of the purchase price. In most circumstances, it is split in half so that the buyer and seller each pay 2%.
About the Turkish Title Deed (TAPU)
A TAPU is an official document issued by the General Directorate of Land Registry and Cadastre that shows who owns a slot of land. Only rightful property owners receive this official document – those with outside rights to the land, such as mortgage buyers, do not receive a title deed.
There are two types of deeds in Turkey
- Blue deed: The blue deed refers to land deeds and shared ownership.
- Red deed: The red deed is issued for residential or commercial properties and refers to individual ownership.
When considering purchasing a property in Turkey, you should take into account the closing expenses, which are one-time payments made upon receiving your title deeds/ownership of the property.
For example, when purchasing a new apartment from a developer, value added tax rates must be paid to the Turkish government at the time of transfer of property. This VAT rate is usually included in the purchase price that is given to you.
Read our Turkey Citizenship by Investment Guide
Value Added Tax (VAT) on Property in Turkey
As of 2017, foreign buyers purchasing real estate from developers in Turkey are exempt from paying VAT on real estate. This has made Turkey an absolute gem for foreign real estate investment.
However, all other commercial, industrial, and professional transactions in Turkey are subject to VAT under Turkish legislation. But, there are a few exceptions:
- If the current owner of the property is not engaged in any business activity in Turkey,
- If the current owner of the property is not in the real estate trading industry and has owned the property for more than two years.
The following additional VAT exemptions are available to first-time overseas purchasers:
- 18% VAT – for commercial properties;
- 1% to 18% VAT – for residential properties;
- 1% VAT – for flats with a net area of less than 150m²;
- 18% VAT – for units with a net area of more than 150m².
With the above exemptions, it is notable that the Turkish government implements a higher tax rate of 18% on those who can afford acquiring a large residential property. In 2013, a new legislation modified the VAT rate in Turkey for flats with a net size of less than 150m². If a residential project received construction authorization after 2013, the following exemptions were applied based on the value of the project’s land:
- If the squared meters of land for the residential project are 500TL/m² or less, the same 1% VAT is requested as previously;
- If the squared meters of land for the residential project are between 500TL/m² and 1000TL/m², an 8% VAT is expected;
- If the squared meters of land for the residential project are 1000TL/m² or higher, an 18% VAT is expected.
Stamp Duty for Property in Turkey
Stamp duty is a tax imposed by a government on legal documents usually pertaining to the transfer of assets or property. In the case of purchasing property in Turkey, upon signing the real estate sales price agreement, you must pay a stamp duty rate in Turkey of 0.948% of the value agreed in the contract.
Annual Property Tax in Turkey
When you own property in Turkey, you must pay an additional annual tax to the Turkish government. As cities across the country are split into big and small, real estate tax in Turkey varies based on the size of the city and kind of property. Your annual property tax in Istanbul, for example, will be 0.2% of your property’s worth.
| Type of Property | Big Cities | Small Cities |
|---|---|---|
| Residential Properties | 0.2% | 0.1% |
| Commercial Properties | 0.4% | 0.2% |
| Lands | 0.6% | 0.3% |
| Farms | 0.2% | 0.1% |
Income Tax on Property in Turkey
If you decide to rent out a property you own in Turkey, you will have to pay income tax on your accrued gross income. The property sale tax in Turkey is also applicable in cases where you decide to sell your commercial property or residential home; however, after five years of ownership, there will be no residential or corporate income tax.
Real estate taxes in Turkish Lira depending on rental income
Up to ₺24,000 | 15% |
Up to ₺53,000 | First ₺24,000=₺3,600, 20% on remainder |
Up to ₺130,000 | First ₺53,000=₺9,400, 27% on remaider |
Up to ₺650,000 | First ₺130,000=₺30,190, 35% on remainder |
Over ₺650,000 | First ₺650,000=₺212,190, 40% on remainder |
Gift Tax or Inheritance Tax on Property in Turkey
If you obtain property by inheritance or donation, you will be subject to taxes ranging from 1% to 30%. This is particularly important for those that obtain Turkish citizenship by descent who may inherit property from family. Turkey property taxes can be paid in two installments over three years. Here are the current gift and inheritance tax in Turkey for properties:
Value of property | Gift tax rate | Inheritance tax rate |
Up to ₺500,000 | 10% | 1% |
Over ₺1,200,000 | 15% | 3% |
Over ₺2,500,000 | 20% | 5% |
Over ₺4,900,000 | 25% | 7% |
More than ₺9,100,000 | 30% | 10% |
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
Frequently Asked Questions About Turkey Property Taxes
Is there property tax in Turkey?
According to the local Land Registry and Cadastre Directorate, the total tax owed to Turkish authorities is 4% of the land value. The land value is frequently less than the property sales price. Unless both parties agree differently, Turkish law requires the seller to pay tax of 2% and the buyer to pay 2%.
Do foreigners pay property taxes in Turkey?
Yes, foreign investors are required to pay property tax in Turkey. However, they are not required to pay VAT when purchasing Turkish real estate through a property developer.
How much is the annual tax on property in Turkey?
Annual property tax in Turkey is between 0.1%-0.6% depending on the the size of the city a property is located in and the kind of property owned.
How do I pay property taxes in Turkey?
In Turkey, there are two ways to pay your property tax: the first option is to go to the tax office and physically pay the lump sum, and the second option is to pay through the municipality’s official website.
What is the property rate in Turkey?
According to Turkey’s Central Bank, the average price of a property in Istanbul in 2022 reached ₺1.6 million ($110,000), which went up from ₺750,000 last year. Additionally, total residential property prices per square meter in Turkey increased by 127% in the five years leading to April 2022, where prices increased by 142% in Istanbul alone. The price increase for newer buildings in Turkey was 131% overall, and 157% in Istanbul.
Do foreigners pay taxes in Turkey?
Yes, foreign nationals are subject to pay tax in Turkey. This applies to property tax, personal income tax, inheritance tax, and corporate tax. However, there are tax treaties and a range of tax incentives available for foreign investors in Turkey.
How much is annual property tax in Turkey?
Residential properties are taxed at 0.1% of their value, or 0.2% if located in a major city. Commercial properties are taxed at 0.2%, increasing to 0.4% in big cities. For farmland, the tax rate is 0.2%, doubling to 0.4% in urban areas. Vacant land is taxed at 0.3%, or 0.6% if in a big city.
How do I pay my property taxes online in Turkey?
The simplest way to pay your annual property tax is via your local municipality’s website. Most municipalities provide online payment options in Turkish Lira (TRY). To access your tax bill and complete the payment, you’ll need your Tax Identification Number (Vergi Kimlik Numarası) and your property’s Tapu (title deed) number.
Is there a capital gains tax on property sales in Turkey?
Yes, the tax is calculated based on the difference between the cadastral property value listed in the TAPU and the property’s market value at the time of sale. For individuals, the tax rate ranges from 15% to 35%, while legal entities are subject to a fixed rate of 23% when selling property in Turkey.
