Acquiring, renting, and selling property in Turkey is subject to a number of taxes and charges.
- TITLE DEED TAX: 4% of the sales price of the property. It is one-time payment for ownership transfer. In most cases it is divided equally, 2% each by the seller and buyer.
- VAT (VALUE ADDED TAX): There are three different VAT rates that must be paid to the government on real estate transactions.
- For commercial properties: 18%
- For Residential properties with net area less than 150 m2: 1%
- For Residential properties with net area more than 150 m2: 8% or 18% (According to the value of the project land)
VAT EXEMPTION ON THE PURCHASE OF REAL ESTATEThe Turkish government has canceled the VAT on real estate sales to foreigners to attract more international investors. The VAT exemption law was approved by the Turkish Parliament on April 1, 2017.
Who can benefit from VAT exemption in Turkey?
- Foreigners who are not residing in Turkey.
- Turkish citizens who reside outside the country for more than six months with a work or residence permit.
- Organizations that do not have an office in Turkey or do not make profits in Turkey.
What are the conditions for applying for VAT exemption?
- This exemption is only applied on the first delivery of real estate from the developer.
- The purchase price is required to be paid in foreign currency. The money brought into Turkey in foreign currency can be paid to the seller in Turkish lira. The VAT return is made after the whole amount is paid to the seller.
- The property can not be sold for a year. The Directorate of the Land Registry adds an annotation to the land register stating that if the residential property or commercial property is sold within one year, the exempted tax will be paid with the default rate.
- INHERITANCE TAX: 13%
- CAPITAL GAINS TAX: 22%- If the buyer will decide to sell the property within five years of the official purchase date as registered in the Title deed, then 22% as capital gains tax will be paid to the government. The buyer may be exempt from this tax after 5 years.
- YEARLY PROPERTY TAX: Cities are divided into two categories: Urban areas and non-Urban areas. Taxes are calculated according to the category and type of property.
Property Type Yearly Tax in Urban areas Yearly Tax in Non-Urban areas Residential Properties %0,2 %0,1 Commercial Properties %0,4 %0,2 Farms %0,2 %0,1 Lands %0,6 %0,3
- Property appraisal report fee: Approximately 2000 TL
- Title deed Circulating capital fee (Döner Sermaye): Approximately 400 TL (For year 2021)
- Power Of Attorney (POA): There are many different types of attorney, and the fees are calculated according to the POA type.
- Document Translation at Notary: Such as passport, address document, and power of attorney translation. There are no fixed fees, it depends on the amount of documents translated.
- Earthquake insurance (DASK): Fee varies from 150 TL to 250 TL (depends on square meters).
- Lawyer Fee: To complete the property purchasing, obtain the Turkish Citizenship or the residence permit, as well as the title deed transfer, it’s highly recommended to hire a reliable Lawyer. Our Lawyers who can speak English will assist you at every stage. Each stage has specific cost to be paid to the Lawyer.
- Monthly Maintenance Fee: Whether you are buying a property in a normal building or compound, you need to pay monthly maintenace fee (Aidat) to the site management that goes towards communal facilities such as stairwell electricity, swimming pools, gym, Landscape maintenance, security and etc. The fee is not fixed, depends on the building or complex you are purchasing from, and the size of the apartment. If you rent out your property, then this fee will be covered by the tenant.
- Electricity, water and gas subscriptions: Approximately 3000 TL