Property related taxes are covered in our expenses and costs article.

Other taxes in Turkey include income tax and capital gains tax.

Income tax law is important for investors, should they wish to lease the property. Income tax bands on income derived from rent are as follows in Turkey.

• Under 13,000 TL – 15%
• 13,001 to 30,000 TL – 20%
• 30,001 to 70,000 TL – 27%
• 70,001 TL and over – 35%

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 20%.

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 20%.

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 2019 for 1,000,000 lira was sold in 2021 for 1,200,000 lira - the profit is 200,000 lira.
• According to the tax brackets, the first 13,000 lira is tax free. The next 17,000 lira is taxed at 20% - 3,400 lira. The next 40,000 lira is taxed at 27% - 10,800 lira. The next 130,000 lira is taxed at 35% - 45,500 lira. This would total 59,700 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

Hence we do encourage you to get in touch with Pera Property management or your accountant to assist you with the calcuation.