Turkey Property Taxes: The Ultimate Guide

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Turkey is a peninsula surrounded by four seas – the Black sea to its North, the Mediterranean sea to its South, the Aegean Sea to its West, and the Sea of Marmara between the European and Asian sides of its land. With beautiful architecture, rich history, a warm and comfortable climate all year round, the country has something to offer everyone seeking to live there.

Turkey has been positioned at 78th in GCS’s Investment Index, showing that investments in the country’s immovable property can be worth anyone’s while. By investing in Turkey’s property market, you will have the chance to successfully apply for Turkish Citizenship.

When you buy property, 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%. When you acquire a brand new apartment from a developer, for example, taxes are usually shared at a 50-50 tax rate. When purchasing a resale property from an individual, however, the buyer is normally required to pay the entire 4%.

Title Deed Fee: A Purchasing Tax

A title deed is perhaps one of the most crucial things to receive when buying property in Turkey, as a TAPU certificate is the document that dictates the transfer of property, specifically stating its rightful owner. It 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 law and the investor visa scheme.

Briefly About 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 and red. Blue is a type of deed that refers to land deeds and shared ownership. 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. When purchasing a new apartment from a developer, for example, 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.

Value Added Tax (VAT)

All commercial, industrial, and professional transactions in Turkey are subject to VAT under Turkish legislation. However, 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 150 m2;
18% VAT – for units with a net area of more than 150 m2.

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

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

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. On the off-chance math is not your forte, you may take a look at the property tax calculator Turkey offered for everyone facing this issue.

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

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 income tax.

Real Estate Taxes in Turkish Lira Depending on Rental Income

Up to ₺53,000 – the tax on the first ₺24,000 of income is ₺3,600, the rest is taxed at a 20% rate.

Up to ₺130,000 – the tax is ₺9,400 for the first ₺53,000 of income, and the rest of the sum is taxed at a rate of 27%.

Up to ₺650,000 – the tax on the first ₺130,000 of income derived is ₺30,190, and the remaining sum is taxed at a rate of 35%.

Over ₺650,000 – the tax on the first ₺650,000 of income is ₺212,190, and the remaining sum is taxed at a rate of 40%.

Gift Tax or Inheritance Tax

If you obtain property by inheritance or donation, you will be subject to taxes ranging from 1% to 30%. Turkey property taxes can be paid in two installments over three years.

Frequently Asked Questions

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?

Taxes in Turkey for foreigners are an essential part of a Turkish tax system. Investors in Turkey must pay taxes, and they are paid regularly over specific periods of the year.

How much is the annual tax on property in Turkey?

Annual property taxes in Turkey vary based on the size of the city a property is located in, and the kind of property owned. You may take a look at the online property tax calculator for Turkey to figure out the sum.

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 municipality 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 report, 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.