The additional costs associated with a property purchase such as legal fees, notary charges, and property tax work out to be less than half of the Spanish equivalent at 5 % of purchase price versus 10 % of purchase price. Beside this advantage as with all tax systems , the rules in Turkey are complex and you are strongly advised to seek professional advice from a specialist. However here is a guide as to what you can expect.

CAPITAL GAINS TAX
Capital Gains Tax in Turkey, whether for an individual or a company, is treated as part of general income tax. Personal income tax varies from 15-40%. Basic corporate income tax levied on business profits is 30% in Turkey, but there are plans for 2007 to reduce this to 20 %

Currently if you hold on to a property for 4 or more years after the date of purchase, you are not required to pay income tax on capital gains at all.

VALUE ADDED TAX ( VAT )
VAT ( KDV in Turkish ) fall within 2 price brackets. 1 % is due on property less than 149 m2, 18 % due on property of 150 m2 or over.

STAMP TAX
Stamp duty applies to a wide range of documents, including contracts, notes payable, capital contributions and letters of guarantee. Stamp duty is levied as a percentage of the value of document at rates ranging from 0.15 % to 0.75 %. Stamp tax is payable by the parties who sign a document. Each and every signed copy of the agreement is seperately subject to stamp tax.

PROPERTY TAX
Property taxes are payed each year on the tax values of land and buildings at rates varying from 0.1 % to 0.6 %. In the case of the sale of property , a 1.5 % levy is paid on the sales value by both the buyer and the seller. The rates are applied twice for property located in the Metropolitan Municipality areas.

Buildings and land owned in Turkey are subject to real estate tax at the following rates.
- Residences : 0.1 %
- Other Buildings : 0.2 %
- Land : 0.1 %

DOUBLE TAXATION TREATIES
Turkey has signed bilateral tax agreements with 60 countries, which means citizens of these countries will not be required to pay income tax on capital gains twice. Countries with which Turkey has bilateral tax treaty agreements are as follows.

Albania, Algeria, Austria, Azerbaijan, Bangladesh, Belgium, Bulgaria, Czech Republic, Croatia, China, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, India, Indonesia, Israel, Italy, Japan, Jordan, Kazakhstan, Kyrgyzstan, Kuwait, Latvia, Lithuania, Luxemburg, Macedonia, Malaysia, Moldova, Mongolia, Netherlands, Norway, Pakistan, Poland, Romania, Russia, Saudi Arabia (but only air transportation activities), Singapore, Slovakia, Slovenia, South Korea, Spain, Sudan, Sweden, Syria, Turkish Republic of Northern Cyprus, Tajikistan, Thailand, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, UK, USA, Uzbekistan. 

RENTAL INCOME TAX
If you have a property in Turkey and you get income by renting it out or letting it, you have to pay  rental income tax for your earnings.

The Presidency of Revenue Administration has studies about taxpayers  who are the non-resident foreigners in Turkey in accordance with taxpayer  focused service principle and Turkish Tax Legislation. 

The one of the studies is the guide book for the rental income declaration of nonresident aliens in Turkey  that you can simply reach by clicking  on  the web adress  http://www.gib.gov.tr/fileadmin/beyannamerehberi/rental_income.pdf  

Nonresident aliens can obtain detailed information about the scope of rental income in Turkey, legal basis, acquisition time of rental income, declaration time and location of rental income, exceptions and equivalent rental value and results of non-filing. 

We hope that this guide book will be informative about rental income tax and declaration.