Real estate taxes

What are real estate taxes in Turkey?

Real estate taxes in Turkey are sums of money paid by both the buyer and seller to the tax department when buying a property in Turkey, or when transferring the ownership of a property from the seller to the buyer, and the same amount of taxes is paid to Turks and foreigners alike.

What are the types of real estate taxes in Turkey?

1- Value Added Tax (VAT):

It is a tax imposed by the Turkish government on all goods and services, at a rate of 18% for commercial properties, and a rate ranging between 1% - 8% - 18% for residential properties. The value of VAT is determined according to the net area of ??the property and not its total area. For example, if the net area of ??the residential property is more than 150 square meters, the value of the added tax will be 18% of the price of this property, but if the net area of ??the residential property is less than 150 square meters, the value of the added tax ranges from 1% to 18%, as the type of property, its area, building level and price per square meter all play a role in determining the value of the tax, and the value added tax is paid only once when buying the property.

2- Title deed tax:

The value of this tax is 4% of the total value of the price of a property as recorded in the sales contract, and it is paid when the title deed is registered at the Real Estate Registry Department in Turkey.

The value of Tapu tax is usually paid equally between the seller and the buyer upon transfer of ownership, that is, when buying or selling, where each party pays only 2% of the value of the tax.

3- Municipal tax on real estate in Turkey:

Turkish municipalities impose on real estate located within the area served by the municipality an annual fee of 0.03% of the value of the property, and this tax is paid for the services performed by the municipality.

4- Earthquake tax:

It is an annual tax paid by the property owner in Turkey to insure his home against natural disasters and earthquakes, and its value is $2 per square meter of property area.

Tax exemption

The tax exemption decision when buying real estate in Turkey was issued in February 2017. This decision stipulates that foreigners who are not residing in Turkey, and Turks residing outside Turkey for a period of 6 months or more, are exempted from VAT.

What are the conditions for tax exemption when buying a property in Turkey?

- The property buyer should be a foreigner who is not residing in Turkey, or a Turkish who has resided outside Turkey for a period of 6 months or more.

- The property must be new.

- Not selling the property for one year from the date of purchase.

- The property must be purchased in one of the foreign currencies, dollars or euros.

- Transferring the purchase amount of the property from a bank outside Turkey to a Turkish bank, or entering it through a Turkish airport.

Real estate fees in Turkey

1- Real estate appraisal report fees:

The value of the real estate appraisal report is about 2600 Turkish liras for properties with an area of ??less than 1250 square meters, and for properties with an area of ??more than 1250 square meters, the value of the real estate appraisal report is about 5600 Turkish liras.

2- Earthquake insurance policy fees:

The earthquake insurance policy is a mandatory insurance for all real estate in Turkey, and it must be attached with the required papers when transferring ownership, and it is an insurance that is used in the event of disasters and earthquakes, and the value of earthquake insurance also varies according to the area of ??the property, and it generally does not exceed $50.

3- Water, electricity and gas subscription fees:

Subscription fees in Turkey are insurance taken by the institutions that provide these services. These insurances are as a guarantee in the event of delay in paying the required dues upon consumption. These contributions are opened after the purchase of real estate, and they are transferred to the name of the new owner of the property.

Fees vary from one institution to another, in total, insurance dues are usually about 1500 Turkish liras, and each insurance is paid in its own institution, and it is refunded when these contributions are closed and invalidated.

4- Dues fees:

The dues are monthly fees collected from the owners of apartments located within residential complexes, and these fees are paid in return for providing basic and additional services such as: heating, cleaning, security, gyms, swimming pools, children's games, and others.

The value of dues fees varies from one complex to another, according to the quality and luxury of the complex, and according to the services it provides to the residents, and the social facilities included in the complex. The value of the dues fees for each apartment is calculated according to its area, and often starts from 12 liras per square meter.