Property tax in Turkey are applicable on both nationals and foreigners. Anyone earning an income in Turkey gets to pay tax. As a foreigner if you’ve made a property investment in Turkey, it is crucial to know about property taxes as well as inheritance tax to make the best out of your investment.
As a non-resident, you will only be taxed on your Turkish-source earnings. This includes any rental income you are earning on your property investment, income from a business you’re running in Turkey and income from employment.
Income tax is applied at a progressive rate on your total taxable income. As of Jan 2022, the income tax rates vary from 15-40%.
This is important if you are looking forward to renting out your holiday home. Since 2018, it is required by law to get a business license (Vergi Levhasi) to declare your rental business in order to operate. The process of getting Vergi Levhasi is simple, and you may want to hire a local accountant to file tax on your behalf to make it easier for you. Just like income tax, business tax is applied at a progressive rate and annual exemptions are provided.
VAT is applied on all imports and exports. This information comes in handy if you are planning to set up a business where you will be selling imported items. You don’t need to worry about VAT though if you’re only interested in buying property in Turkey since a new government law offer VAT exemption to foreign investors.
Property tax is deducted annually and varies between 0.1% – 0.6%. The rate applicable on your property depends on various factors including the location and the type of property.
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