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Capital Gains Tax in Turkey

In this page, we refer to capital gains tax on sale of Turkey property to mean capital gains tax on selling real estate in Turkey and not to the stamp duty that buyer and seller pays equally (stamp duty is a fixed 2 % of sales price payable by buyer and seller each).

Istanbul Apartments For Sale in Turkey Capital Gains Tax in Turkey

Buying a holiday home in Turkey is becoming an increasingly popular choice for people around the globe seeking beautiful holiday retreats.  When looking to sell or buy property in Istanbul Turkey, it is important to acquaint yourself with all possible costs you may encounter.  There are certain things you must initially consider and processes and paperwork you must complete in order to purchase or sell land and homes in Turkey.  One of them is the Capital Gains Tax, which is the tax you will pay on the amount that is the difference between the purchase price of a property when you buy it and the sale price when you sell it.  This article will provide a brief overview of the Capital Gains Tax involved in Turkish real estate transactions.

If you sell your Turkish property within five years of purchasing it (check the date on your title deed tapu to be sure of it), you will have to pay tax on sale of Turkey property (Turkish Capital Gains Tax). The amount that is taxed is calculated by subtracting the declared purchase value of a property from the declared sales value; the resulting amount, your profit on sale of Turkey property,  is the sum that is subject to the Capital Gains Tax.

Rates of capital gains tax on sale of Turkey property  
This rate is structured similarly to the income tax rates, but with different amounts:

If the profit is under 6,000 Turkish Lira, there is no CGT

If the profit is between 6,000 lira and 7,000 lira, the CGT is 15%

If the profit is between 7,000 lira and 18,00 lira, the rate is 25%

If the profit is between 18,000 lira and 40,000 lira, the rate is 27%

If the profit is any amount over 40,000 lira, the tax rate is 35%

So, for example, if you bought a property for 200,000 lira and sold it for 220,000 lira two years after the purchase date, you would be

subject to paying CGT on 20,000 lira at the tax rate of 27%. These taxes must be paid regardless of nationality and resident/non-resident status. However, Turkey has negotiated taxation policies with numerous countries around the world in order to avoid people being subject to “double taxation,” meaning that if you pay taxes on something in Turkey and take the money back to your home country, you will not have to pay taxes on it in your home country. Additionally, if you purchase and sell property Turkey through a business you run in Turkey, it is not subject to Capital Gains Tax. The CGT is considered part of normal business income and is taxed accordingly as part of your business.

If the home you purchase is brand new, you will have one year from the tapu date in which you are permitted to sell your home in Turkey or property tax-free, but after that you will have to wait until the five-year period is up if you want to sell without paying the Capital Gains Tax. This is an important tip to remember if you are able to hold onto your property for five years; you will not have to pay the Capital Gains Tax in Turkey.

The Turkish Capital Gains Tax is similar to many others in the world. Remember that you will not be able to avoid paying taxes in Turkey, so it is best to familiarize yourself with all costs and tax on sale of Turkey property you will have to pay.

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