Answering All Questions Related to Taxes When Buying Real Estate in Turkey

It is crucial for investors to understand tax information and legal procedures in Turkey before purchasing any property. The government’s decisions to reduce property taxes have increased foreign demand for the Turkish real estate market and its various types of properties.

Therefore, we offer our expertise and advice to help you learn all the details about taxes and fees when buying real estate in Turkey.

Types of Property Taxes in Turkey:

Property taxes in Turkey consist of various types: one-time taxes and annual taxes.

We will outline four types of property taxes in Turkey:

1. Property Transfer Tax (Tapu): Also known as the cost of title deed transfer, this tax is 4% of the property’s total value stated in the sales contract. It is levied during the registration of the title deed at the Land Registry Office in Turkey and is paid equally by the seller and buyer. This tax is applicable at the time of transfer of ownership, whether through sale, purchase, or bequest to family beneficiaries of the actual owner.

Value Added Tax (KDV)

This is a type of property tax that is paid only once, alongside a value-added tax ranging from 1% to 18%. However, this tax is the only one in Turkey from which a foreigner may be exempt if they do not have a residence permit in real estate or Turkish citizenship.

Annual Property Tax (Emlak Vergisi)

This is a property tax paid annually by Turkish citizens or foreigners. The annual tax is approximately 0.002% of the property’s registered value and is paid to the municipality of the area where the property is located, in exchange for services provided by the municipality.

Capital Gains Tax (Değer Artışı Kazancı Vergisi)

This tax is paid after selling a property and is based on the profit difference between the property’s purchase price and its selling price within five years. An exemption applies if the property is sold after the five-year holding period. The rate varies from 15% to 35% of the profit difference.

Property Fees:

In addition to taxes, purchasing property in Turkey involves fees paid to Turkish municipalities during ownership. These annual fees (around 0.03%) include:

• Translation Fees: Buyers must cover translation costs for necessary documents like passports.
• Interpreter Fees: Buyers also pay for interpreters assisting them during ownership, regardless of the language.
• Notary Fees: These fees, paid to the notary for certifying translated documents, generally do not exceed $50.

Translation Fees

This fee is for the transfer of property ownership and is paid at the mapping office of the Land Registry Department. Its cost typically does not exceed $200.

Tapu Fees

This fee is paid by the buyer after receiving the title deed, or the certificate of ownership for the property, at the Land Registry Office, generally not exceeding $60.

In total, additional taxes and fees may cost the owner about 8% of the overall property purchase price.

Taxes and Fees After Ownership Transfer

These taxes accompany the property buyer after ownership is transferred and are as follows:

• Municipal Taxes: Turkish municipalities charge annual fees, not exceeding 0.03% of the property’s total value. These fees are usually paid every May for the services provided by the municipality.

• Insurance Premiums: Buyers are required to pay fees for earthquake and natural disaster insurance, typically around $2 per square meter.

• Maintenance Fees: If the buyer is in a residential complex, they must also pay monthly maintenance fees based on the apartment’s area, the complex, and its location.