Rental Income Tax
Rental income tax is the type of tax that people who earn rental income on real estate are obliged to pay to the state. What is meant by real estate; residential, home, workplace, land, cottage, or villa? If you have a property in Turkey, if you have resided in Turkey for more than 6 months during a calendar year, if you are a T.C. citizen working outside the country on behalf of public or private organizations headquartered in Turkey; the profits and revenues (both in Turkey and abroad) accordance with the Turkish tax legislation you must pay income tax from renting.
When Should I Pay Rental Income Tax?
A rental income declaration must be filed every year. It can be submitted to the Tax offices to which you are registered or through the Interactive Tax Office website. The tax is paid in equal installments twice a year. The deadline for filing rental income tax declaration and for the 1st installment is March 31, 2022. The second installment must be made by the last day of July. Taxes that are not paid on time are subject to a penalty fine.
How much rent income is Tax-free in Turkey - Rental Income Tax Exemptions?
The minimum rental income, which is not taxed is 9,500 TL. If the total rental income you receive from your real estate within a year is below 9500 TL, you do not need to pay taxes for the year 2022.
How is Rental Income Tax Calculated in Turkey?
When calculating the tax amount, the exemption amount (9,500 TL for 2022) is deducted from the total rental income. Then the calculation can be done in two ways. When the lump sum expense option is selected, 15% of the expense is deducted from the rental income. When the actual expense is selected, the expenses with invoices must be shown. You can deduct these bills from your rent tax.
Some factors that can lessen your tax burden;
• If you have taken out a loan for your property, you can reduce the interest payments of the loan taken.
• You can show bills for the property tax and the sanitation tax.
• You can show the bills of your repair costs, elevator expenses, exterior thermal sheathing, and energy-saving expenses.
In addition, if the person who rents the real estate lives in a rented house, the rent payments can be used as an expense.
The amount to be paid is determined by the remaining amount.
2022 Tax Rates
• up to 32,000 TL 15%.
• up to 70.000 TL – for 32.000 TL of income the tax is 4.800 TL, and the rest of is taxed at 20%.
• up to 170.000 TL - for 70.000 TL of income the tax is 12.400 TL, the rest of is taxed at %
• up to 880.000 TL - for 170.000 TL of income the tax is 39.400 TL, the rest is taxed at 35%.
• Over 880.000 TL - for 600.000 TL of income the tax is 287.900 TL, the rest is taxed at 40%
If the rental income is taken in foreign currency, it is converted into TL according to the rate determined by the Central Bank of The Republic of Turkey.
Rental income for partnerships is still taxed as personal income. Each person who is a partner in the rent can benefit from the exception applied to the rental income separately.