The investors planning to make a property investment in Turkey should first be informed about the property tax and the expenses to be paid during the property purchase. The taxes and expenses related to property purchase are relatively lower compared to some European countries. The property tax amount is the same both for Turkish citizens and foreigners. The taxes and the expenses might cost 5 percent of the purchase price during the after-sale process. This might rise to 20 percent in some countries.
Property Transfer Tax: It is a one-off tax which must be paid while purchasing a property. You must pay the property transfer tax to a Turkish bank when you make the title deed application. If your property is still under construction, you don’t need to pay property transfer tax until your property is complete.
Annual Property Tax: When you complete the purchase process for your property, you must pay the annual property tax. The amount of the tax is the same with both Turkish citizens and foreigners. The property tax is 0.0002 percent of the amount mentioned in your title deed, and you can pay it to local municipalities.
Property Insurance: When you complete the title deed process for your property, you need to pay the Compulsory Earthquake Insurance (DASK) annually. You can get your property insured although it is not compulsory.
Income Tax: If you reside in Turkey, you are taxed on income arising from your sources in Turkey. If you work, run your own business or rent your property in Turkey, you must pay tax on your income from these sources. The income tax in Turkey may vary from 15 percent to 35 percent depending on your income.
Capital Gains Tax: If you sell your property five years after your purchase, you must pay 35 percent of the difference between the purchasing price and its present value. If you sell your property five years after your purchase, then you don’t have to pay capital gains tax.