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Sale of Turkish Property and Capital Tax Gains

  • 15 July 2020

One must not be confused with stamp duty, which is 2.2% that the seller and buyer should likewise pay when a property in Turkey is to be sold capital tax gains at the sale of your Turkish property is somewhat completely different.

If you choose that you need to sell your property in Turkey in five years from the original purchasing date we endorse the checking date at the title deed, if you are not assured then you will have to pay tax at the time of the property sale liable to the fact that how much profit is to be made from the sale.

This type of tax is recognized as the Turkish Capital Tax Gains, and the volume payable will be considered by deducting the declared original purchase price of the property from the professed sales value of the home. The amount of profit came from the sale, is the amount which will be considered as tax.

 Rates of capital gains tax at the sale of Turkish property

This rate is scheduled similarly to the income tax rates with different amounts:

  1. Profit ranges over 40,000 Lira, the tax rate is 35%.
  2. Profit ranges 18,000- 40,000 Lira, the tax rate is 27%.
  3. Profit ranges 7,000-18,000 Lira, the tax rate is 25%.
  4. Profit ranges 6,000- 7,000 Lira, the CGT is 15%.
  5. Profit is less than 6,000 Lira, there is zero CGT.

Case study as an example

 If you have bought a home in Turkey for 200,000 Lira after 2 years, you decided that you want to sell this home. The house has valued, and you sale the property for 217000 Lira.

Since you sold the homeless than the period of five years after purchasing it, now you will be subjected to tax for the profit you earn after selling the home. As you made 17000 Lira in profit, you have to pay 25% as the tax rate.

These taxes should be paid, irrespective of what nationality you have, either you are a Turkish resident or nonresident.

Do you pay a double tax in your home country?

One of the most important things about Turkey is that Turkey has an excellent taxation rule record with different countries throughout the world. It means that you must be able to evade the double taxation rules, which means that if you pay 25% taxes for your profits in Turkey, you would not be subjected to tax payable when you get the money back to your home country.

Purchasing a property over a business in Turkey

The additional striking thing is that if you purchase a property in Turkey by a business that you run in Turkey, you would not be exposed to the Capital  Tax gains as it is considered a part of regular business income and tax is deducted therefore as a part of your business in the country.

Getting a brand-new home in Turkey

If you purchase a home in Turkey, which is brand- new, then the rules are somewhat different. For once you have purchased a brand- new home in Turkey, you have almost one year from the date from TAPU ‘title deed’ at what you can sell your home, and you are not subjected to disbursing tax. Though when that first year is gone, you are then subjected to pay tax if you sell your home within five years.

In general, the Turkish Capital tax gains works likewise to the other countries throughout the world. Thus, this should not come as a huge surprise to anybody who previously has a property in some other country.

Remember, if you grip on to your property for more than five years, you would not have to pay taxes at a profit, this can be helpful for you to save a supreme return for your novel investment in the Turkish property.

If you have any other queries about this or like other matters, feel free to contact us or give us a call, and we will be happy to assist and advise you accordingly.

 

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