As with every country, you will have to pay tax in Turkey. This is a guide as the rules and regulations tend to change fairly often in Turkey, if you go to Turkey to purchase a property you will be given the most up-to-date information at that time. British nationals are taxed in Turkey on income obtained from renting a property in Turkey and are liable to a number of other property-related taxes.
The tax year in Turkey is the calendar year. There is an agreement (DTA) between the UK and Northern Ireland and The Republic of Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains.
Tax and stamp duty
Property Purchase tax /stamp duty – 4% total of the declared & registered purchase price – the split of the purchase tax between seller and buyer is subject to agreement in each purchase. (Increased from 3.3% to 4% September 2012, decreased to 3% (from 4%) March 2017) currently 4% December 2017.
Taxes payable when purchasing/selling a property in Turkey:
Turkish Property Transfer taxes are 4% (in 2017) are payable by both parties (the buyer and the seller) the sale of a property. These fees (i.e. 4% in total) are based on the declared value of the property. However, the declared value of the property cannot be lower than the ‘tax value’ determined by the local municipality, which is also used as the base of the local property tax.
Rental income taxes:
If you rent your property to an individual or a company you have to file a tax return for your rental income for the previous calendar year to the nearest Tax Office between 1 – 25 March. The taxes are payable in 2 equal instalments –the first in March, the second in July. If you use a rental management company to look after your properties they can arrange these payments for you and inform you when the tax payment is due.
Selling your property (resale):
If you use an Estate Agent to sell your property for you then there will be an added agency fee. If the property is a resale property there is a 3% agency fee on the purchase price.
It is imperative for you to pay any outstanding fees owed on maintenance for example if your property is on a complex. You will also need to close your accounts for electric and water fees. If you have owned your property for at least 5 years you will not be liable for income tax.
Use this information only as a guide, when you come to purchase property or sell your existing property in Turkey you will be given the correct information at that time. It may seem daunting however you will be guided by the agent you are buying or selling with. Once you buy you will be advised of council tax for your property which is payable yearly, the tax is determined by the value of your property.