Property taxes are an essential aspect of property ownership in Istanbul, as they contribute to local government revenues and maintain vital public services. Understanding property taxes is crucial for homeowners, investors, and anyone involved in real estate transactions. In this comprehensive guide, we will detail real estate taxes in Istanbul for the year 2024, covering types of taxes, assessment methods, exemptions, and payment procedures.

Types of real estate taxes in Turkey

• Real estate tax: Real estate tax is an annual tax imposed on the value of real estate in Istanbul. This tax is based on the registered value of the property, which is determined by the municipality to which this property belongs. The property tax rate is determined by the Turkish government and can vary depending on the use and location of the property. Real estate taxes in Turkey are amounts of money paid by both the buyer and seller to the Tax Department when purchasing a property in Turkey, or when transferring ownership of a property from the seller to the buyer, and the same value of taxes is paid to Turks and foreigners alike.
• Title deed tax: Title deed tax is a one-time tax paid when ownership of a property is transferred. The price is determined according to the location of the property and its market value. It is necessary to calculate this tax accurately when buying or selling real estate to avoid any financial surprises. 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 registering the title deed with the Land Registry Department in Turkey. The value of the title deed tax is usually paid equally between the seller and the buyer when transferring ownership, that is, when buying or selling, with each party paying only 2% of the value of the tax.
• Municipal tax on real estate in Turkey: Turkish municipalities impose an annual fee of 0.03% of the property value on real estate located within the area served by the municipality, and this tax is paid for the services provided by the municipality. This tax supports local sanitation and waste management services. The amount of the environmental cleanup tax varies depending on the size and location of the property, and is usually paid on a quarterly or annual basis.
• Earthquake tax: It is an annual tax paid by the property owner in Turkey to insure his home against natural disasters and earthquakes. Its value is $2 per square meter of the property’s area.

Property sale tax in Turkey

According to Article 80 of the Turkish Income Tax Law, a capital tax applies when selling real estate in Turkey within the first five years from the date of purchase. However, if the property is sold in Turkey within this time period (5 years), you will be exempt from paying any taxes according to the provisions of the law. The value of the property sale tax in Turkey is calculated according to the declared value at the time of purchase, which is determined through the title deed or what is called the Tapu. Accordingly, the residential property tax in Turkey is 0.1% of the declared value.

How to pay real estate taxes in Turkey

Real estate tax in Turkey can be paid in two different ways. The first involves paying directly at the municipality building to which the real estate is subject. As for the second method, the tax can be paid by visiting the official website of the municipality and transferring the amount due to the official bank account of the municipality.

Tax exemption

The tax exemption decision when purchasing real estate in Turkey was issued in February 2017. This decision stipulates that foreigners not residing in Turkey and Turks residing outside Turkey are exempt from value-added tax.

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

• The property buyer must be a foreigner who does not reside in Turkey, or a Turk residing outside Turkey.
• The property must be new.
• Not selling the property for one year from the date of purchase.
• The property must be purchased in a foreign currency, dollar or euro.
• Transferring the property purchase amount from a bank outside Turkey to a Turkish bank, or entering it through a Turkish airport.