You’ve Secured Your Passports, What’s Next?

Turkish Citizenship by Investment has become a popular choice for individuals worldwide. While some opt to settle in Turkey, others continue to reside in their home countries. In either case, there are numerous post-approval responsibilities to adhere to regarding tax regulations.

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Annual Property Tax in Turkey

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Initially, a declaration must be submitted to the municipalities where the immovable property is situated. Subsequently, property tax payments can be facilitated through the municipality’s cashier offices, website, or banking channels. Tax rates, which vary for each property, undergo annual adjustments. The rates for normal construction costs per square meter to be applied in 2024 were announced in the 83rd Serial Number Real Estate Tax General Communique published in the Official Gazette on August 31, 2023, by the Ministry of Treasury and Finance and the Ministry of Environment and Urbanization.

The tax value is calculated by increasing the previous year’s tax value by half of the revaluation rate determined for the same year, following the provisions of the Tax Procedure Law, starting from the year subsequent to the initiation of taxation.

The 2024 real estate (building, land, and field) tax values and the minimum land and field square meter unit values to be considered in the calculation of real estate tax values for taxpayers in 2024 were announced in the 84th Serial Number Real Estate Tax Law General Communique published in the Official Gazette on December 30, 2023. The revaluation rate for 2023 was determined and announced as 58.46% in the Tax Procedure Law General Communique (Order No: 554) published in the Official Gazette on November 25, 2023. The 2024 tax values of properties belonging to these taxpayers will be determined by increasing the 2023 tax values by half of this year’s revaluation rate (58.46/2=) 29.23%.

According to Article 30 of Law No. 1319, property tax is paid in two installments: the first installment in March, April, and May, and the second installment in November.

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Rental Income Tax

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If you rent out your property in Turkey, you are subject to rental income tax, which must be declared annually by March.

Deductible items may include:

• Lighting, heating, water, and elevator expenses for the rented property,

• Management expenses proportional to the property’s importance,

• Insurance expenses for the property and related rights,

• Interest expenses on debts incurred for the property and rights,

• 5% of the acquisition price for a property rented out as a residence for a period of 5 years from the acquisition year. (This deduction, equal to 5% of the acquisition price, is applied solely to the revenue of the relevant property, and the unapplied portion is not considered as surplus expense. It is not applicable to properties acquired before 2014.)

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Additionally, various other deductions exist, including Life Insurance Premiums, Education and Health Expenses, Donations and Aid, Sponsorship Expenses, Individual Participation Investor Deduction, etc. For detailed information and consultancy, feel free to contact Onyx.

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Though subject to annual changes, an income tax exemption is applied to rental income obtained within a calendar year from renting out property as a residence, with an exemption of 21,000 TL for 2023 and 33,000 TL for 2024. Rental amounts exceeding these figures will be taxable.

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Once the necessary tax declaration is submitted, the income tax calculated on the declared rental income should be paid in two equal installments in March and July of the following year through annual income tax returns:

• The first installment, including stamp duty, must be paid by April 1,

• The second installment must be paid by July 31.

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Taxation is a complex matter that requires diligent supervision and undergoes constant changes in Turkey. Professional support is essential to navigate this domain and avail oneself of appropriate exemptions. To benefit from our expertise and receive tax consultancy, please don’t hesitate to contact us to schedule an appointment.

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