renting property in Turkey

FAQs : RENTING YOUR PROPERTY IN TURKEY

A lot of Oceanwide Properties clients purchase buy to let property in Turkey. Providing the property is bought in the right area at the right price, the rental returns can be very attractive (over 10%), so who can blame them?

Of course, making money from your property does mean the tax man takes note so there are a number of legal rules and regulation to follow. Please see our list of frequently asked question (FAQs) below. We cover most common rental queries including where to buy, what appeals to holidaymakers, tax regulations and legal guest registrations. Simply click on the question of interest to see the answer revealed below, click again to minimize. Don’t see the answer? No problem, CONTACT US.

Where is the best location to purchase a buy to let property in Turkey?

If you are looking to make premium rental returns from a coastal property in Turkey you really need to consider purchasing in the tourist resorts. This is the easiest option as where there are tourists, there a rental demand. All the coastal regions we represent boast popular tourist resorts so you are spoilt for choice (see AREA GUIDES) – the key is to find the right property at the right price. As a rough guide, our most popular buy to let areas are as follows:

  • Fethiye Region – Hisaronu, Ovacik and Calis
  • Bodrum – Gumbet, Bitez, Turgutreis and Yalikavak
  • Antalya – Kalkan, Konyaalti, Alanya, Lara and Kemer
  • Marmaris – Icmeler, Turunc and Central
  • Didim/Altinkum – Towards the coast and Akbuk.

What type of property will attract the best rental return in Turkey?

The type of property you buy will largely depend on your budget. Most popular resorts have a good range of property options, some even have complexes boasting additional facilities aimed at the tourist and rental market (pools, bars, gyms, saunas, spas, restaurants – even guaranteed rental returns etc.) – but do remember prices tend to be higher in popular tourist areas due to demand.  If you are on a tight budget a cheap apartment with a shared pool in a central resort area should attract a good return without breaking the bank. Alternatively private villas in a tourist location will attract a rentals and bookings providing they are marketed correctly. If you are prepared to put in a little work marketing the property, a unique remote villa, luxury property, farm or cottage promoted correctly can reap in excellent rewards (think rural retreat, luxury escape in the sun etc.).

How do I rent my property in Turkey legally?

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).

Do I need to follow regulations if I let non-paying guests (friends/family) stay in my property in Turkey?

No. Only paying guests need to be declared. Owners letting friends and family stay for holidays in their property in Turkey for free do not need to form a business, inform authorities or be part of the system.

Can properties in Turkey on a site or complex be rented out on a short term basis?

Private properties in Turkey situated on sites may be rented out on a short term basis providing regulations are followed and the condominium/complex rules allow for this. Condominium law states owners/residents of the condominium must agree to a business operating on site (some communal agreements or sites may not allow this so check first).

Do families hosting students for language schools in Turkey need to declare their guests?

Yes. Anyone renting a room or their property to paying guests of any kind need to declare their presence. However, those hosting students for language schools in Turkey should speak to the school re taxation procedures first as many have arrangements where tax is already declared and deducted from host family payments.

What are the penalties for not following rental procedures in Turkey?

The following fines apply for not following rental procedures in Turkey:

  • Failure to submit daily report: 700TL per day
  • Inaccurate reporting of information: 5,191TL
  • Failure to register for the system: 10,383TL

*Accurate April 2017 but please check for adjustments.

How do you apply for the GIYKIMBIL ID system in Turkey? What are the costs?

Step 1: To register for the GIYKIMBIL ID system you need to be a company (see Question 3, either Limited or a Pansiyon license) therefore the first step is to employ an accountant to set one up. Ask around to find a good bi-lingual accountant locally. All businesses need to employ an accountant in Turkey. They are paid on a monthly basis with fees varying according to size of business and work involved (starting costs from c250TL+ per month).

Step 2: Your accountant should oversee the set up of your company and assist with gaining the relevant operating licence from the local council (Belediye).

Step 3: Once you have an Operating License you apply for a Facility Number. You then head to the local Jandarma or Polis headquarters where they will give you a password and set you up on the GIYKIMBIL system. The initial software should be free of charge however this is not enough to submit daily entries fully. Additional software needs to be purchased (various options available) in order to send XML files stating who is in residence on a daily basis (rooms vacant or not). Some of the more advanced options automate the process for you providing initial details are entered (saving time and inconvenience).

What are the rental business set up costs in Turkey?

These will vary according to personal circumstances and your location. It costs in the region of 3500TL to initially set up a limited company in Turkey. Monthly running costs anywhere from 2000TL per month (tax deductable).

How to pay TAX in Turkey?

There are two ways for registered companies to pay tax in Turkey. The sum is calculated in terms of:

Actual (real cost): Real profits determined. This is where accurate accounts are kept, revenue is recorded, expenses and outgoings shown, receipts and invoices saved and submitted.

Lump-sum (assumed):  Tax office assumes (as rule of thumb) that c25% of profits declared are cost and tax is equated accordingly (most people in Turkey don’t declare real costs).

What are the TAX benefits of running property as a rental business in Turkey?

There are a number of benefits if you choose to run your property as a rental business in Turkey.

Water, electric, insurance, renovation and maintenance costs, municipal charges and taxes in kind relating to the business are just a few of the expenses deemed tax deductible. Your accountant will best advise you as to what you can claim back from the tax man but assume most running and upkeep costs.

(If the property makes less than 3,900TL in a year, nothing needs to be declared. Anyone earning over 500TL per month should declare earnings).

I pay TAX on rental earnings in my own country. Can this be deducted?

Income generated from a property in Turkey needs to be declared in Turkey then tax claimed back in other countries as necessary. End of year accounts are submitted (Beyanname) each year with profits generated and tax paid shown. Proof of tax paid can be obtained from the tax office (signed and stamped) and this should be sufficient for tax deduction purposes in other countries.

Where is the best location to purchase a coastal buy to let property in Turkey?

If you are looking to make premium rental returns from a coastal property in Turkey you really need to consider purchasing in the tourist resorts. This is the easiest option as where there are tourists, there a rental demand. All the coastal regions we represent boast popular tourist resorts so you are spoilt for choice (see AREA GUIDES) – the key is to find the right property at the right price. As a rough guide, our most popular buy to let areas are as follows:

  • Fethiye Region – Hisaronu, Ovacik and Calis
  • Bodrum – Gumbet, Bitez, Turgutreis and Yalikavak
  • Antalya – Kalkan, Konyaalti, Alanya, Lara and Kemer
  • Marmaris – Icmeler, Turunc and Central
  • Didim/Altinkum – Towards the coast and Akbuk.

What type of property will attract the best rental return?

The type of property you buy will largely depend on your budget. Most popular resorts have a good range of property options, some even have complexes boasting additional facilities aimed at the tourist and rental market (pools, bars, gyms, saunas, spas, restaurants – even guaranteed rental returns etc.) – but do remember prices tend to be higher in popular tourist areas due to demand.  If you are on a tight budget a cheap apartment with a shared pool in a central resort area should attract a good return without breaking the bank. Alternatively private villas in a tourist location will attract a rentals and bookings providing they are marketed correctly. If you are prepared to put in a little work marketing the property, a unique remote villa, luxury property, farm or cottage promoted correctly can reap in excellent rewards (think rural retreat, luxury escape in the sun etc.).

How do I rent out my Turkish property legally?

There are a number of rules and regulations a property owner must follow in order to rent their home legally in Turkey. 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).

Do the procedures apply to long term and short term property lets?

No. These rules apply only to short term (daily/weekly/holiday) property rentals where an income is made. It applies to everyone advertising rental of their property or charging money to guests staying for less than a month. For properties let long term (1 month+), other rental rules apply.

What if owners let non-paying guests, e.g. friends or family, stay in their properties – do they still need to sign up for the system?

No. Only paying guests need to be declared. Owners letting friends and family stay for holidays for free do not need to form a business, inform authorities or be part of the system.

Can owners of villas or apartments on a condominium rent out their properties?

Private homes on sites may be rented out on a short term basis providing regulations are followed and the condominium rules allow for this. Condominium law states owners/residents of the condominium must agree to a business operating on site (some communal agreements or sites may not allow this).

What if you have an agreement with a language school to host foreign students where tax is paid by the school or organisation – Do property owners need to form a business?

Those renting to students short term should speak to the language school re taxation procedures (should they already deduct tax) and ensure they are followed.  In general, if a student is staying for less than a month, the rules apply unless the school has a separate arrangement. Those residing longer should follow procedures regarding long-term rentals.

What are the penalties for not signing up for the GIYKIMBIL ID system and other associated fines?

Failure to submit daily report: 700TL per day

Inaccurate reporting of information: 5,191TL

Failure to register for the system: 10,383TL

*Accurate April 2017 but please check for adjustments.

How do you apply for the GIYKIMBIL system? What are the costs?

Step 1: To register for the GIYKIMBIL system you need to be a company (see Question 3, either Limited or a Pansiyon license) therefore the first step is to employ an accountant to set one up. Ask around to find a good bi-lingual accountant locally. All businesses need to employ an accountant in Turkey. They are paid on a monthly basis with fees varying according to size of business and work involved (starting costs from c250TL+ per month).

Step 2: Your accountant should oversee the set up of your company and assist with gaining the relevant operating licence from the local council (Belediye).

Step 3: Once you have an Operating License you apply for a Facility Number. You then head to the local Jandarma or Polis headquarters where they will give you a password and set you up on the GIYKIMBIL system. The initial software should be free of charge however this is not enough to submit daily entries fully. Additional software needs to be purchased (various options available) in order to send XML files stating who is in residence on a daily basis (rooms vacant or not). Some of the more advanced options automate the process for you providing initial details are entered (saving time and inconvenience).

What are business set up and running costs in Turkey?

These will vary according to personal circumstances and your location. It costs in the region of 3500TL to initially set up a limited company in Turkey. Monthly running costs anywhere from 2000TL per month (tax deductable).

How do companies pay TAX in Turkey?

There are two ways tax payments are calculated in Turkey.

Actual (real cost): Real profits determined. This is where accurate accounts are kept, revenue is recorded, expenses and outgoings shown, receipts and invoices saved and submitted.

Lump-sum (assumed):  Tax office assumes (as rule of thumb) that c25% of profits declared are cost and tax is equated accordingly (most people in Turkey don’t declare real costs).

What are the TAX benefits of running a business in Turkey?

(If the property makes less than 3,900TL in a year, nothing needs to be declared. Anyone earning over 500TL per month should declare earnings).

Water, electric, insurance, renovation and maintenance costs, municipal charges and taxes in kind relating to the business are just a few of the expenses deemed tax deductable. Your accountant will best advise you as to what you can claim back from the tax man.

 

Many foreigners pay TAX on rental earnings in their own country. Can this be deducted or what can be done so tax is not paid twice?

Income generated from a property in Turkey needs to be declared in Turkey then tax claimed back in other countries as necessary. End of year accounts are submitted (Beyanname) each year with profits generated and tax paid shown. Proof of tax paid can be obtained from the tax office (signed and stamped) and this should be sufficient for tax deduction purposes in other countries.

*Disclaimer: Legalities and processes in Turkey are constantly on the change. Although Oceanwide Properties do their best to ensure that all information on our site is correct, we are not financial, tax or legal advisers. If you have any concerns it is always best to check with an official adviser or authority.