Property related taxes are covered in our expenses and costs article.
Other taxes in Turkey include income tax and capital gains tax. This article is in line with the tax brackets for 2023.
Employment income tax is as follows:
- 15% of incomes for individuals with incomes of ₺ 70,000 or less;
- 20% for incomes over ₺ 70,000;
- 27% for incomes over ₺ 150,000;
- 35% for incomes over ₺ 550,000;
- 40% for incomes over ₺ 1,900.000.
All income other than employment income tax rates for taxpayers is now:
- 15% of incomes for individuals with incomes of ₺ 70,000 or less;
- 20% for incomes over ₺ 70,000;
- 27% for incomes over ₺ 150,000;
- 35% for incomes over ₺ 370,000;
- 40% for incomes over ₺ 1,900,000.
For those who buy property as a company, corporation tax applies on the income of the company. This is applied at a flat rate of 23%.
Note, tax is applied on the profit generated, not the gross income.
Capital gains tax (CGT)
When selling your property, you are obliged to pay tax on the profit generated. CGT is applied on the difference between the inflation adjusted buying price and the selling price.
The current CGT tax rate is applied at the rate of non-employment income tax rate (as per the above figures). If the property is owned by a company, then the corporate rate applies on the profit, which is currently 23%.
Individual ownership of a property for more than five years means your profit is tax free.
Calculation of tax on property profits
Calculation of how much tax is due when selling your property can be complicated. We recommend contacting us for your free calculation, or discussing with your accountant. The calculation becomes complicated as the original purchase price can be adjusted to account for inflation.
A standard calculation would involve a simple % amount of the profit. As an example:
- A property purchased in 2021 for 1,000,000 lira was sold in 2022 for 1,200,000 lira – the profit is 200,000 lira.
- According to the tax brackets, the first 70,000 lira is tax at 15% (10,500 lira).
- The next 80,000 lira is taxed at 27% – 21,600 lira.
- The next 50,000 lira is taxed at 35% – 17,500 lira.
- However Turkish tax law allows the accountant to adjust the purchase price for inflation based on the indices published by the government. This would reduce the tax burden significantly
- There is an excellent calculator at hesapkurdu.com. It’s in Turkish but google translate does a great job translating.
Hence we do encourage you to get in touch with Pera Property management or your accountant to assist you with the calcuation.
Inflation adjustment
The tax authority allows for the original purchase price to be adjusted in accordance with monthly inflation rates according to the CPI rate. This means that a property purchased several years ago has its purchase price increased in line with annual inflation. This reduces the tax bill significantly. A good website that allows you to calculate your tax burden is www.hesapkurdu.com.
