Property taxes in Turkey
In the interest of our company to enhance the trust of its customers and to inform them about all the details related to buying and selling real estate in Turkey, we will explain in this article the types of real estate taxes, that some of them are paid only for one time, some paid annually, and some paid monthly, and we will correct the wrong ideas promoted by some people or fraudulent companies to exploit the ignorance of foreigners about Turkish laws as they do not have sufficient information about Turkish tax system. For instance, the state does not impose any additional taxes on foreigners when buy real estate in Turkey, only those property taxes that paid by Turkish citizens and foreigners alike. Turkish government provides these facilitations in order to attract investors and encourage them to invest in real estate, which is one of the most vital sectors that has a great impact on Turkey's economy. Thus, the government is working now on many reforms to reduce these taxes.
So, all that is rumored about taxes imposed only on foreigners is not true. It should be noted that property taxes in Turkey is reasonable compared to other countries competing in real estate sector.
To learn about the law of obtaining Turkish citizenship through real estate investment: press here
One-time paid taxes:
1- Value Added Tax (VAT):
The value of this tax is calculated according to the value of the property, ranging from 1% to 18%, since the type of the property, its area, the level of construction and the price per square meter of the land on which the property has based affect the tax's value. It is not calculated from the total area of the property but from the net area, and it is paid only once, when you buy the property. In this context, Turkey Parliament has announced a new law since late February 2017 regarding the exemption of foreign investor who buy a property for the first time from VAT, which states: "VAT is canceled for foreign investors who buy property for the first time when buying a property in Turkey, where this tax exemption applies when they pay in foreign currencies". It is worth mentioning that more than 160 countries around the world impose VAT on real estate, and Turkey is the only country where you can be exempted from VAT in the way that described above.
2- Property Title (TAPU SENEDI) Tax:
This tax is imposed when you register the property in your name and start issuing the title deed for your home, and its value is 4% of the price of the property as agreed in the contract, and the amount is divided into both, the seller and the buyer, 2% per party. This applied for small properties such as homes, apartments and villas.
To learn more about Property Title in Turkey: read here
Taxes and fees that paid annually:
1- Annual Property Tax:
It is a property tax that must be paid once-a-year since you own a real estate in Turkey, whether you are a foreigner or a Turkish citizen. It worths only 0.002% of the value of the property as registered in the title deed, and it is paid to the local municipality in the beginning of each year.
2- Seismic and natural disaster insurance fees:
Seismic insurance is mandatory for real estate owners, and the fees usually does not exceed 0.1% of the value of the property, and it is paid to an insurance company.
Fees that paid monthly:
These fees are paid by the owners to the company supervising the residence due to the services that are available, such as swimming pools, playgrounds, gardens, surveillance and camera system, in addition to the maintenance and services of cleaning. The value of these fees varies from one residence to another depends on the quality of the services provided, and it is ranging between $1.0 - $1.5 per square meter, a maximum.
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In order not to be a victim of fraud, the buyer must deal with well-known companies with extensive experience in real estate sector, and be aware of all the details related to buying properties in Turkey. To read more about the future of real estate investment in Turkey: The future of real estate investment in Turkey