Taxes in Turkey are an important consideration for anyone buying, holding, renting, or selling property. Whether you are purchasing an apartment in Istanbul, investing in rental property, or planning a future sale, understanding the Turkish tax system can help you avoid surprises and make better investment decisions.
While our guide to property purchase costs in Turkey explains the taxes and fees paid during a property transaction, this article focuses on the taxes that may apply after purchase, including income tax, rental income tax, annual property tax, capital gains tax, inheritance tax, and corporate taxation.
This guide is intended for international property buyers and investors looking to understand how Turkish taxation applies to real estate ownership.
Turkish Property Taxes at a Glance
Rental Income
Rental income generated in Turkey may be subject to Turkish income tax.
Property Tax
Property owners generally pay annual municipal property tax.
Capital Gains Tax
Property sold within five years are subject to tax on gains.
Income Tax in Turkey
Turkey operates a progressive income tax system. Individuals pay higher rates as income increases. Rental income and taxable capital gains are generally subject to these income tax brackets.
2026 Income Tax Brackets in Turkey
| Income Range (TRY) | Tax Rate | Tax Calculation |
|---|---|---|
| 0 – 190,000 | 15% | 15% of income |
| 190,001 – 400,000 | 20% | TRY 28,500 + 20% of excess |
| 400,001 – 1,500,000 | 27% | TRY 70,500 + 27% of excess |
| 1,500,001 – 5,300,000 | 35% | TRY 367,500 + 35% of excess |
| Over 5,300,000 | 40% | TRY 1,697,500 + 40% of excess |
Rental Income Tax in Turkey
If you rent out property in Turkey, rental income may be taxable. The amount actually taxed depends on available exemptions, allowable expenses, and the taxpayer’s overall circumstances.
Typical deductible expenses may include:
- Property management fees
- Maintenance and repairs
- Insurance costs
- Certain financing expenses
- Professional services
Foreign property owners are generally taxed on rental income generated within Turkey even if they are resident abroad.
Rental Income Example
Suppose a property generates TRY 360,000 per year in rental income and the owner incurs TRY 60,000 of allowable expenses.
The taxable income would be reduced to TRY 300,000 before applying any available exemptions and the applicable income tax brackets.
Annual Property Tax (Emlak Vergisi)
Property owners in Turkey are generally required to pay annual municipal property tax.
The applicable rate depends on factors such as:
- Residential or commercial use
- Property location
- Whether the property is within a metropolitan municipality
Property tax is generally paid to the local municipality and is separate from income tax obligations. At the time of writing this amount is 1 in 1000 of the property’s rated value (Rayic bedeli). The property’s rated value is the valuation put on it by the municipality and can be found by visiting the municipality with the property’s tapu, or if you have access, via the e-devlet system (turkiye.gov.uk).
Capital Gains Tax in Turkey
Capital gains tax can be one of the most important considerations for property investors.
For individual owners, gains realised from selling property within five years of purchase may be subject to Turkish income tax.
However, if the property has been owned for more than five years, gains are generally exempt from capital gains tax for individuals.
How Capital Gains Are Calculated
Capital gains are not simply calculated as the difference between the purchase price and sale price.
Turkey allows inflation indexation in many circumstances, meaning the acquisition cost can be adjusted using official inflation indices before calculating the taxable gain.
The calculation generally considers:
- Purchase price recorded on the title deed
- Sale price
- Inflation-adjusted acquisition cost
- Allowable transaction costs
- Applicable income tax rates
Capital Gains Example
If a property is purchased for TRY 2,000,000 and sold for TRY 5,000,000 within five years, the nominal gain appears to be TRY 3,000,000.
However, after applying inflation adjustments and allowable deductions, the taxable gain may be substantially lower.
Corporate Tax for Property Investors
Investors purchasing property through a Turkish company are generally subject to corporate tax rather than personal income tax.
The standard corporate tax rate is currently 25% on taxable profits.
In addition, from 1 January 2025 Turkey introduced a domestic minimum tax regime intended to ensure that corporate taxpayers pay a minimum level of tax.
Under this regime, companies generally calculate tax under both:
- The standard corporate tax system (25% on taxable profits after eligible deductions and exemptions); and
- A domestic minimum tax system based on 10% of income before certain exemptions and deductions.
The higher amount is generally payable.
Buying Property Personally vs Through a Company
| Factor | Individual Ownership | Company Ownership |
|---|---|---|
| Capital Gains | Generally exempt after 5 years | Usually taxable |
| Rental Income | Income tax rates | Corporate tax regime |
| Administration | Relatively simple | Additional compliance obligations |
| Best Suited For | Long-term investors | Professional or large-scale investors |
Taxes for Foreign Property Owners
Foreign investors are generally taxed on Turkish-source income generated from property located in Turkey.
- Rental income is taxable in Turkey
- Capital gains is taxable if sold within five years
- Double taxation agreements may apply
- Income may also need to be declared in the investor’s country of residence
Turkey has tax treaties with many countries that may reduce double taxation risks.
Inheritance and Property Transfer Tax
Property can be transferred through inheritance, and inheritance or transfer taxes may apply depending on the value transferred and the relationship between the parties involved.
The applicable rates are progressive and should be confirmed with a tax professional at the time of transfer.
Tax Timeline for Property Owners
- Purchase: Title deed tax and acquisition costs
- Ownership: Annual municipal property tax
- Rental: Rental income tax obligations
- Sale: Potential capital gains tax if sold within five years
- Inheritance: Possible inheritance and transfer taxes
Frequently Asked Questions About Taxes in Turkey
Do foreigners pay tax in Turkey?
Yes. Foreign property owners may be taxed on Turkish-source income such as rental income and taxable capital gains.
Do I pay capital gains tax after five years?
Individual property owners are generally exempt from capital gains tax when a property is sold after more than five years of ownership.
Is rental income taxable in Turkey?
Yes. Rental income may be taxable and is generally subject to Turkish income tax rules.
Do property owners pay annual property tax?
Yes. Annual municipal property tax generally applies to residential and commercial property owners. This is 1 in 1000 of the property’s rated value.
What is the corporate tax rate in Turkey?
The standard corporate tax rate is currently 25%, subject to applicable legislation and the domestic minimum tax rules.
Need Help Buying Property in Turkey?
Pera Property helps international buyers purchase, hold, rent, and sell property in Istanbul. We can also introduce trusted accountants, lawyers, and tax advisers where required.
