There are a number of rules and regulations a property owner must follow in order to rent property in turkey legally. Until recently many chose to overlook the laws as they were rarely enforced. The difference in 2017 is that authorities have become far stricter in following procedures due to the State of Emergency. Property owners must now adhere to tax regulations and the GIYKIMBIL ID registration system to make sure authorities know who is in the country and where they are staying so they can find them should they need to. This helps Turkey limit the chances of terrorist activities and is a common practice across Europe.
These procedures apply to those renting their property on a short term basis to paying guests only (e.g. holidaymakers). In short, you have three options; use an agent (the easiest and most straightforward way), set up a limited company or, if you have Turkish citizenship or a work permit, operate under a B&B license.
The GIYKIMBIL ID System
All short term paying guests staying in a hotel, B&B, private home, room or property need to be accounted for on a daily basis via the government’s GIYKIMBIL ID system. This computer software is applied for via your local security services (Polis or Jandarma). It is used to submit paying guests details to the authorities. The initial software is free but requires you to manually submit details on a daily basis or face fines. Most purchase additional software to make life easier and automate the process doing a lot of the work for you. The drawback is that only businesses can access and receive the system. Those renting their properties therefore have three options to qualify for the system;
- Open a company and operate as a Pansiyon (B&B). This mainly applies to Turkish citizens, those with existing companies in Turkey and foreigners with work permits. If you fall into this category you can apply to the local council (Belediye) for a Pansiyon license and trade as a B&B. You can then apply to the local security services for access to the GIYKIMBIL system.
- Set up a Limited Company (Municiple Operating License). If you are renting a number of properties, this may be the best option for you. Those that don’t fall into the above category and are reluctant to use an agent need to apply for a Municiple License. You need to employ the services of an accountant (paid monthly) who will help you with necessary paperwork and legalities. Once the license is received, the GIYKIMBIL system can be set up.
- Employ a Rental Agency. If you have limited time and language ability and only intend renting one or two properties, employing a professional rental agent is probably your best option. An agent can manage your rentals for you thereby avoiding the need to set up a company or submit guest details daily. They effectively take on the management of your property and rentals for a specified time including responsibility for the daily submission of guest details via their company GIYKIMBIL system. People should however read the agents contract very carefully as to who is responsible should ID submissions be forgotten or inaccurate information submitted (both incurring hefty fines). Agents normally charge either a one off fee or percentage of rental income generated (between 5% and 10%). People should however be aware that, as owners of an income generating property, you should still submit earnings and pay relevant tax in Turkey on a yearly basis (on top of monies paid to an Agent).