Capital Gains Tax when selling Turkish property

Capital Gains Tax when selling Turkish property

When we talk about ‘capital gains tax on sale of Turkey property’, we mean the ‘capital gains tax’ on selling real estate in Turkey and not to the stamp duty that buyer and seller pay equally (stamp duty is a fixed 2.2% of sales price).

When looking to buy or sell property in Turkey, there are certain things you must initially consider together with processes and paperwork you must complete.  One of them is the Capital Gains Tax, which is the tax you will pay on the difference between the purchase price of a property when you buy it and the sale price when you sell it.

If you sell your property in Turkey within five years of purchasing it (check the date on your title deed – tapu – in capitals?), you will have to pay Turkish Capital Gains Tax. The amount that is taxed is calculated by subtracting the declared purchase value of a property from the declared sales value.  The resulting amount, your profit on the sale of your property, is the amount subjected to Capital Gains Tax.

Rates of capital gains tax on sale of Turkish property  
This rate is structured similarly to the income tax rates, but with different amounts:

  • Profit under 6,000 Turkish Lira, there is no CGT
  • Profit 6,000 to 7,000 lira, the CGT is 15%
  • Profit 7,000 to 18,000 lira, the CGT is 25%
  • Profit 18,000 to 40,000 lira, the CGT is 27%
  • If the profit is any amount over 40,000 lira, the CGT is 35%

So, for example, if you bought a property for 200,000 lira and sold it for 220,000 lira two years after the purchase date, you would have to pay CGT on 20,000 lira at the tax rate of 27%.

These taxes must be paid regardless of nationality and resident/non-resident status. However, if you pay taxes on something in Turkey and take the money back to your home country, you will not have to pay taxes on it in your home country, so you don’t suffer ‘double taxation’. Also, if you purchase and sell property Turkey through a business you run in Turkey, it is not subject to Capital Gains Tax. The CGT is considered part of normal business income and is taxed accordingly as part of your business.

If the home you purchased was brand new, and you want to sell it within one year from the tapu (capitals?) date, you can sell it property tax-free.  After that you will have to wait until the five year period is up if you want to sell without paying the Capital Gains Tax.  This is an important tip to remember if you are able to hold onto your property for five years; you will not have to pay the Capital Gains Tax in Turkey. (check this paragraph)