Luxury real estate tax in Turkey
There are many types of taxes in Turkey. There are real estate taxes, income taxes, value-added taxes, investment taxes, and others that are imposed on individuals, companies and investors in Turkey, on Turkish citizens and on foreigners as well, and are imposed on residents for a period of less than six months with values that differ from Residents for more. Today, in our article, we will discuss a new type of tax imposed on the real estate sector, which is the luxury real estate tax. What is this tax? And what is the mechanism for calculating it? And is there a tax exemption for it?
What is the luxury real estate tax in Turkey?
In these days, a new tax is imposed on luxury real estate in Turkey, which is exclusively residential, and its price in the real estate market is more than 5 million Turkish liras.
The new tax includes all luxury real estate in Turkey, such as palaces, villas, independent residential buildings, which are exclusively residential, and whose price exceeds five million Turkish liras. For a property with a price exceeding five million Turkish liras, the tax is valid from its date and must be paid one year after this date. Here, we must note that this tax is considered an annual tax, and the value of the luxury real estate tax in Turkey is paid in two parts. The first part is paid in February, while the second part is paid in August of each year.
What is the mechanism for calculating this tax?
The value of the tax is calculated according to the value of the cost of building per square meter in addition to the value of the land share specified for the property, and here we list the tax value for you according to the price of the property:
• If the value of the property ranges between (5.227000 - 7.841000) Turkish liras, the tax value will be (0.003)
• If the value of the property ranges between (7.841000 - 10.455000) Turkish liras, the tax value is (0.006)
• If the value of the property exceeds (10.455000) Turkish Liras, the tax value shall be (0.010)
If the property is registered in the name of more than one owner, then the tax is divided according to the value of each owner's share of the property separately.
Is there an exemption from luxury real estate tax in Turkey?
Luxury real estate tax is exempted in Turkey if the property is burned or demolished, or if the property is no longer usable, then the property is exempted from tax from the date of the occurrence of any of these events.
There are also cases of exemption from this tax even if the property value condition is met, including the following cases:
• Apartments and residential real estate in Turkey that are owned or usufruct by municipalities, universities and the Presidency of the Housing Department are exempted.
• In the event that the owner of the property owns more than one property in Turkey that fulfills the requirements of the tax assignment, the smaller property within it is exempted from this tax, by proving that it is his only residence.
• In the event that the property has several owners, the owner of the least shares shall be exempted from them, provided that his share of the property is his only residence.
• Residential properties belonging to the consulates of foreign countries and to international organizations located in Turkey, such as the residences of ambassadors and United Nations delegates, are also exempted.
• Finally, residential apartments and real estate under construction that are pledged by construction and construction companies and whose ownership has not been transferred to individuals yet, including apartments obtained by the building contractor from the project, provided that his apartments are not rented or in use in any way.
There are many who wish to enter the field of real estate investment in Turkey, and there are those who wish to buy a property in Turkey of high value, either for housing and luxury residence, or for the purpose of real estate investment in Turkey, or even for the purpose of obtaining Turkish citizenship by buying property. If you are one of them, we note here that you always keep up with the tax laws related to real estate, which are officially announced in the Turkish newspapers, so that you are fully aware of every thing .
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