Turkish Tax News
16 May 2016Erdal AYDIN

Real Estate Tax Liability for Foreigners in Turkey

Pursuant to Real Estate Tax Law (No. 1319), paying real estate tax on land and buildings (real property) located within the boundaries of Turkey is obligatory. The real estate tax is a municipal tax levied on the value of real property, and the applicable tax rate varies depending on how the real property is classified. The property tax burden fall on the owners of the real property, and they are required to pay it.

Real estate tax exemptions exist under some specific conditions. No tax is payable by people having only one residence that is not larger than 200 m² (square meters) and having following conditions:

Those who provide evidence that they have no income, or those whose incomes consist solely of the monthly salary paid by social security institutions (which are founded through a special law), war veterans, the handicapped, and the wives and children of the martyrs. These exemptions do not apply to buildings like summer houses or mountain huts that are used for recreational use at particular times of the year.

However, according to Law No. 1319, no tax exemptions exist for foreigners simply because they are not Turkish citizens. Thus foreigners have the same rights and responsibilities as Turkish citizens for real estate tax liability.

Real estate tax is calculated based on the (tax) value of the property and is subject to the following tax rates:

Classification of the
real property
For real property located outside a metropolitan municipal areaFor real property located inside a metropolitan municipal area
Other buildings0.2%0.4%
Vacant land for construction purposes0.3%0.6%

Foreigners who buy real property should make a real estate tax declaration to the relevant municipality within the year they purchase the real property. The required documents for this declaration are as follows:

- Copy of the property deed
- Copy of the purchaser’s birth certificate
- Copy of the occupancy permit for the buildings
- Address of the property (neighbourhood, street, and number)
- Residential address and work address of the declarant

Real estate taxes are paid (directly or through the e-municipality system) to the local municipality for the real property located inside its boundaries. If the real property is in another city and the municipality does not use an e-municipality system, the tax can be paid by transferring money to the bank account of the relevant municipality from branches of the General Directorate of Post and Telegraph Organisation (PTT) or branches of banks.

Real estate tax can be paid in two equal instalments. The first instalment term starts on March 1 and ends on May 31. The second instalment term starts on November 1 and ends on November 30. Taxpayers can pay the full annual tax amount in the first instalment term if they wish.

In this context, foreigners in Turkey who own land or buildings must pay the first instalment of the 2016 real estate tax by 31.05.2016 and they must pay the second instalment by 30.11.2016.

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