The residency status of a foreign national will decide how he/ she will have to pay income tax. The following rules will be applicable:
In contrast to other European countries, the Turkish real estate taxes (which are compulsory to pay by all, whether you are resident or nonresident) are quite how. If you intended in the property business in Turkey, you should have an understanding of how taxes are charged. A comparison of the property tax between Turkey and other European countries can prove to be some valuable information. Here's a look into the tax system in Turkey in contrast to other European nations.
There is no relaxation in tax if the profits or incomes earned are reinvested in real estate. Taxes related to real estate are divided into two main types.
The profit gained while selling a property is known as a capital gain. The gain is equal to the difference between the 'declared amount' of the property on sale and the 'declared amount' of the property purchased. For understanding here is an example, you bought a holiday apartment in Turkey for Euro 100,000 in 2010 ( the amount declared on the documentation on which stamp duty was paid Euro 60,000), and you sold it for Euro 130,000 in 2013 (amount claimed on sale was Euro 80,000). The profit on sale has come out to be Euro 20,000.
This is your capital gain, and being a non-Turkish resident, you will have to pay tax on this gain. At Turkish Lira 6,000, the payable profit limit starts. Less than this capital gains are not liable to tax payment. Up to Lira 40,000, the tax rate reaches around 23%, and above that, it may reach up to 35%. Therefore, if you earn only Euro 20,000 in 2013, after annual exemptions and lower rate bands, you will finally be paying around Euro 3,800, which makes about 19%. Another useful information for your business planning would be that after five years of ownership in Turkey, you will be exempted from the capital gains tax. That means after this period, you have to pay3 nothing in the form of capital gain tax. The income coming from the rental business is also subject to tax as capital gains tax. Earning gained from Turkish real estate falls in taxable property. This tax is again subject to an annual exemption amount. For net income, more than Lira 40,000 tax implements from 15% to 35%.
On the contrary, Russia is not a country that can be regarded as a friend of its owners. The evacuation only occurred after six months of arrears, and it is still not easy. In addition, regardless of the lease terms, Russian tenants can terminate the lease after just three months' notice.
Besides, external real estate investors have to pay a 30% income tax on all income without deductions. If you are shopping in a city other than other major cities, you still need to pay the highest property tax of 1.5% and the highest property tax of 2.2%.
In Austria, as non-residents, you will substantially pay a stiff property tax. You also need to understand the additional property taxes that you plan to sell in less than 10 years because you need to tax capital gains. Normal income is 25% to 30%, but there is no cost to ease this effect.
France has strange tax laws related to rental income. There is a clear difference between the taxes you will pay. It is only defined by whether you rent a furnished or unfurnished property. If you are a "professional" landlord in France, you may also be punished.
In the case of Panama, foreign investors must avoid levying value-added tax on real estate, but there are also property taxes that increase based on the present value of the real estate.
The worst place to become a landlord is probably Italy: the landlord is angry about the 23-43% tax on leasing income. Moreover, for residency, you will be charged a tax on your worldwide income.
Switzerland does not want to be listed as one of the best countries to tax everyone's life. Enjoy a 54.5% rental income tax on Swiss cabins.
Some countries levy moderate property taxes and property taxes, but many of them are not the right choice due to civil strife, political, or national economic challenges.
Greece is a decent choice. As the current property tax and income tax rates are lower than Turkey, but Greece has not yet found a stable national financial system.
You should research a lot before investing in overseas real estate. However, Turkey's property tax and income tax are low, asset value growth is high, and the obstacles to foreign ownership are minimal.
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