Which Taxes Are Foreigners Buying a House in Turkey Subject To?

News No Comments 25 February 2025

Buying a property in Turkey is an appealing investment opportunity for many foreigners, thanks to the country’s strategic location, vibrant culture, and growing real estate market. However, before diving into a property purchase, it’s essential to understand the taxes involved in the buying process.

In this blog, we will break down the taxes that foreigners are subject to when purchasing property in Turkey, ensuring that potential buyers are fully aware of their obligations.

1. Title Deed Transfer Tax (Tapu Harcı)

The Title Deed Transfer Tax is one of the most significant taxes when purchasing property in Turkey. This tax applies to both Turkish citizens and foreigners.

  • Rate: The tax rate for the Title Deed Transfer is 4% of the property’s purchase price or its appraised value, whichever is higher.
  • Who Pays: Typically, this tax is shared equally between the buyer and the seller. However, it’s negotiable, and the buyer often assumes full responsibility for this cost.

2. Value Added Tax (VAT)

Value Added Tax (VAT) is another important tax to consider when purchasing property in Turkey, though it doesn’t apply to every property.

  • Rate: The VAT rate for residential properties ranges between 1% and 18%, depending on the property’s size and location.
    • 1% VAT applies to properties with a total area of less than 150 square meters.
    • 18% VAT is applicable to properties exceeding 150 square meters.
  • Who Pays: VAT is paid by the buyer, and it is calculated based on the purchase price of the property.

3. Stamp Duty (Damga Vergisi)

In addition to the Title Deed Transfer Tax and VAT, foreigners buying property in Turkey may also be subject to Stamp Duty.

  • Rate: The rate for Stamp Duty is 0.948% of the total transaction value.
  • Who Pays: Generally, both the buyer and the seller are responsible for paying this tax. However, it can also be negotiated to be paid entirely by one party.

4. Annual Property Tax (Emlak Vergisi)

Once a foreigner owns a property in Turkey, they will be subject to an annual property tax. This tax is due each year, regardless of whether the property is rented out or not.

  • Rate: The property tax rate depends on the type and location of the property:
    • 0.1% of the property’s value for residential properties.
    • 0.2% for commercial properties.
  • Who Pays: The property owner is responsible for paying the annual property tax, which is calculated based on the property’s value determined by the local municipality.

5. Income Tax on Rental Income

If a foreigner rents out their Turkish property, they are required to pay income tax on the rental income.

  • Rate: The tax rate for rental income depends on the amount earned:
    • 15% on income up to 24,000 Turkish Lira.
    • 20% on income between 24,000 and 53,000 Turkish Lira.
    • 27% on income over 53,000 Turkish Lira.
  • Who Pays: The property owner must pay this tax, and it is filed annually.

6. Inheritance and Estate Tax

Foreigners owning property in Turkey are also subject to inheritance and estate taxes.

  • Rate: The rate for inheritance tax depends on the value of the estate and the relationship between the deceased and the heir. The tax rate can range from 1% to 30%.
  • Who Pays: The heirs of the deceased property owner are responsible for paying this tax.

7. Capital Gains Tax (CGT)

If a foreigner sells their property in Turkey within 5 years of purchasing it, they may be subject to Capital Gains Tax (CGT). This tax applies to any profit made from the sale.

  • Rate: The CGT rate is 15% on the profit made from the sale.
  • Who Pays: The seller is responsible for paying this tax on the gain made from selling the property.

Conclusion

Foreigners buying property in Turkey are subject to several taxes, including the Title Deed Transfer Tax, VAT, Stamp Duty, annual property tax, income tax on rental income, inheritance tax, and capital gains tax. It is essential for potential buyers to understand these tax obligations to avoid unexpected costs during and after their property purchase.

Before buying property in Turkey, foreigners should consult with a local real estate expert or tax consultant to ensure they comply with Turkish tax laws and make the most informed decision.

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