Luxury Real Estate Tax in Turkey

When you acquire a luxury property in Turkey, you have taxes imposed by Turkish laws, where each property is used for residential purposes, provided that its value reached more than 5 million Turkish liras, these are covered by luxury real estate tax or as called dwelling tax values.

But there were some amendments to Act No. 7194, on the collection of this tax from real estate to meet the conditions, starting from 2020. Another amendment was made to the status of this tax, under No. 24 of the Real Estate Tax Act, which is provided on the delay of commissioning the luxury real estate taxes made to 2021. The amendment to this tax was published in the Turkish Official Gazette in on 15 January 2021.

This tax is applied on real estate that exceeds the value above and was imposed starting from the year following the overall value exceeded, so commissioning for real estate that exceeded value in 2020 would be in 2021.

The concept of residential property includes every residential building that forms an independent real estate part, and also includes every independent real estate part of the buildings containing independent or more parts, ie, independent residential parts, which are calculated separately, each part individually. The property is determined to be residential or not through the real estate records.

How do you specify the tax value?

The luxury real estate tax value is determined by determining the costs of the square meter for construction, which is jointly determined by the Ministry of Finance and Treasury, the Ministry of Environment and Urbanization, as well as the value of the specific land share of the property, according to the legal regulations by the evaluation committees.

The tax value will be:

• If the value of the property is 5.227.000 Turkish lira to 7.841.000 Turkish lira, the tax rate is 3 per thousand
• If the value of the property is 7.841.000 Turkish lira to 10.455,000 Turkish lira, the tax rate is 6 per thousand
• More than 10,455,000 Turkish liras, the tax may be 10 per thousand.

Who pays this tax and when?

The dwelling tax is paid by the residential property owner, which achieves tax terms or has the right to use this property. If they are not available, the tax is paid by the user of the property, and if the property is owned by more than one person, each person pays for his share in the property.

The tax commissioning began after a year from:

1. The date of exceeding the tax value mentioned in Article (42) of the Real Estate Tax Act, for the value of dwelling values, which is (5,000,000 Turkish lira in 2020 and 5.227.000 Turkish lira in 2021).
2. The date of a change in tax value for real estate is due to a positive value of the tax value mentioned in paragraphs 1 to (7) of Article (33) of the Real Estate Tax Act.
3. Adding an extension to construction and modification including adding an elevator to construction, or adding central heating.
4. Changing the format of the use of construction fully legally

Taxes may be exempted if this real estate is burned or demolished, or are fully unusable, or which met the conditions of exemption from real estate tax and confirm exemption by the date of the event.

Residential real estate is exempted from the values ​​of dwelling tax, even if the terms of value are met in the following cases:

First: The value ​​of dwelling tax is exempting all residential apartments in Turkey, owned by private or public departments, such as municipalities, universities, and the presidency of housing management) or if they have the right to use these properties.

Second: they also exempted more than one property, investigating the terms of commissioning at dwelling taxes within the borders of the Turkish Republic. The smallest real estate is exempted from commissioning conditions, provided that they have an only residential property for those who have the right to use it.

Third: The minimum share is also exempted at the real estate that meets tax conditions if his share in the property is the only property used for residence.

Fourth: The values ​​of dwelling tax are exempted from all real estate, which is owned by foreign countries, and are used by facilitators and consulates). The housing owned by international institutions, operating within the Turkish Republic's borders is exempted from this tax as well.

Fifth: residential real estate in Turkey, which is under construction, which is under custody operating in the structural sector, and has not been sold or owned for the first time, including residential properties obtained by the contractor for construction, provided that this residential real estate are not leased, or are used in any way.