Property In Turkey - Properties Bodrum - Real Estate - Immobilier
Tax in Turkey
Residence Rules:
You will be treated as resident in Turkey if you have your permanent domicile in Turkey, or if you spend more than six months in Turkey in a calendar year. Businessmen, scientists, journalists, scholars, officials and other such persons who come to Turkey for a specific and temporary job are not considered to have settled in Turkey even if they spend longer than six months there.
Residence permits are usually valid for two years but are renewable for an unspecified number of times.
Income Tax:
Residents of Turkey are liable to income tax on their worldwide income. Non-residents of Turkey are subject to income tax in Turkey on income deriving from Turkish sources alone.
Tax Rates for 2006:
Taxable Income |
Tax Rate |
Tax Rate |
0 - 7,000 |
15% |
15% |
7,000 - 18,000 |
20% |
20% |
18,000 - 40,000 |
27% |
27% |
Over 40,000 |
35% |
35% |
Deductions:
Employed individuals are entitled to deduct their rental, health, clothing, food and education expenses, up to certain limits.
Tax Filing and Compliance Obligations
Tax Returns are generally only required where income has not been taxed at source. Even where a tax return is filed, there is no need to report the income that has suffered withholding tax.
Self-employed individuals must make 4 advance payments of tax, one every quarter, of 20% of the net profit. Their tax returns are due by 15 March following the tax year in question.
Social Security Payments:
Turkish employees will pay around 16% of their salary in social security contributions, subject to a maximum limit. Overseas citizens working in
In Turkey you are liable to pay contributions of 5%, up to a maximum limit.
Capital Gains Tax
From 1st January 2003 to 31 December 2008, gains made by individuals on the sale of residential property are exempt provided the property has been held for at least 4 years. This 4 year requirement does not apply if the property was inherited. Otherwise, gains are taxed as ordinary income according to the scale rates shown above.
Individuals (residents and non residents) are not required to file a tax return to report their capital gains, regardless of the amount of gains, if they arise from the disposal of the following assets:
Shares acquired for no consideration (by inheritance or gift).
Shares listed on a Turkish stock exchange that have been held for at least 3 months. Shares issued by a Turkish AS company that have been held for at least 1 year.
There is an annual capital gains tax exemption of TL 10,000.
Property Taxes:
Plot of vacant land tax 0.3%
Land and Residence tax 0.1%
Other properties tax 0.02%
These property taxes are calculated against local municipal valuations, not the property purchase price and are payable annually every year 50% at the end of May and 50% at the end of November.
Wealth Taxes:
There are no wealth taxes in Turkey.
Inheritance and Gifts Taxes:
Turkish citizens are subject to inheritance and gift tax on worldwide assets received. Foreigners resident in Turkey are liable to inheritance tax and gift tax on worldwide assets received from Turkish citizens and on assets located in Turkey. Non resident foreigners are subject to inheritance and gift tax only on assets located in Turkey.
The tax rates usually vary between 1% and 30% depending on the residence status of the recipient and the location of the property.
The tax is payable over 3 years, in May and November.
Inheritance and Gift Law:
Children are reserved heirs in Turkey and have automatic inheritance rights. If you have no children, your parents become your reserved heirs. If your parents are no longer alive, your sisters or brothers are next in line to inherit. A spouse has limited entitlements and the amount to which they are entitled depends on whether there are children or not.
The reserved portion for children is 75%, for parents 50%, for each brother and sister 25%. The spouse is entitled to the remainder. If there are no reserved heirs, the spouse is entitled to the entire estate.
Turkish gifts laws provide that non Turkish residents can only gift Turkish real estate to relatives resident in Turkey.
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Turkey has favourable Tax Laws for Investors such as: "Capital gains made by individuals on the sale of residential property or properties are exempt provided the property has been held for at least 4 years".
