If you’re thinking of buying a property in Turkey for a retirement home or somewhere to let out as a holiday rental, then it’s worth remembering too when budgeting, that you will have property taxes to pay.
Just like in the UK the tax can be either government or local authority-issued. Here’s our Oceanwide Properties Turkey guide to the type of tax you can expect to pay when buying – or selling – a Turkey property:
Value-added Tax
If investing in a new build via a construction company then VAT will apply. You’ll be expected to pay one per cent VAT if the property is larger than 150 square meters. Larger than that and the VAT rate jumps up quite considerably to 18 per cent.
Transfer Tax
This is a tax you are due to pay if you transfer the ownership of your property to another individual. It is currently sitting at four per cent of the property’s value and must be paid to the state by both the seller and the buyer.
Capital Gains Tax
This is the biggie really in terms of making a profit when selling a property in Turkey onto to another individual. In other words anything that is a financial gain is taxed at between 15 per cent and 30 per cent.
Property Tax
This is a yearly tax which works out roughly between 0.1 per cent and 0.3 per cent and is dependent on the type of property involved and what state the land is in. It also depends on whether or not the building is residential or commercial. This tax – which is paid annually (but can be split into two yearly payments) – is usually higher in cities than villages or resort areas. A statement must be made every four years. It is possible to appoint a lawyer, or even an accountant, to make tax arrangements on your behalf in Turkey.
Earthquake Tax
This is a compulsory tax and is paid once a year. It means your property is covered in terms of damage by an earthquake (such as fire, a landslide, an explosion etc). Should your property be damaged it’ll be compensated (according to your insurance value) and paid from the Turkish Catastrophe Insurance Pool (TCIP). It’s possible to buy extra coverage from insurance companies.
Non-payment of Taxes
A lien can be placed on a property on which tax has not been paid in a timely manner. Having said that, the Turkish authorities have the jurisdiction to arrest bank accounts and assets.
For more information or advice on buying a property in Turkey please don’t hesitate to get in touch with our team here at Oceanwide Properties Turkey.
