What You Need to Know About Luxury Real Estate Tax in Turkey

What is the background of the Turkish mansion tax?

The object of the luxury real estate tax applies to Turkish real estate within the sovereign territory of Turkey, which has the status of an apartment and whose value exceeds 5 million Turkish lira in 2020, and falls within the scope of the valuable real estate tax.

The term "residential property" includes any residential building forming a separate part of the property, and each separate building part comprising one or more separate parts. This means that the parts of the detached estate whose value is calculated separately are separate parts.

Valuable residential buildings The tax base for residential buildings is determined on the basis of the valuation calculated by the Directorate General of Land Registry and Cadastre. After the valuation phase is complete, the Board of Directors will take a decision on properties with a value exceeding TL 5 million. The results are available on the institution's official website. Owners have 15 days to object to the review.

What is the mansion tax in Turkey?

Residential properties valued between 5.25 million lire and 7.87 million lire ($600,000) will be taxed at 0.3 percent of the amount above the base level, according to legislation drafted by the Ministry of Finance and Finance.

Pursuant to Amendments to Law No. 7194; the tax will be imposed on qualifying properties from 2020 onwards.

Article 24 of the Property Tax Law further changes the status of mansion tax in Turkey, delaying the introduction of the valuable property tax until 2021. The tax was reported and published in the National Gazette on January 15, 2021.

How is the mansion tax calculated?

The tax is calculated based on the construction cost value per square meter and the plot share value determined for the property. Here is how the Turkish mansion tax is calculated:

Residential buildings worth up to TL 10.5 million ($750,000) are taxed at an additional rate of 0.6% above TL 7.87 million.

Homes worth more than 10.5 million lire will be taxed at 22,500 lira ($1,700), plus 1 percent on the amount above the base level.

If the property is registered under more than one owner, the tax will be distributed separately according to the value of each owner's share of the property.

Who Pays the Mansion Tax?

Luxury real estate tax in Turkey is paid by those who own real estate in Turkey worth more than TL 5 million. This tax includes all luxury properties in Turkey such as: B, villas, detached houses, residences or mansions.

You can also obtain Turkish citizenship through real estate investment if your property in Turkey exceeds 5 million Turkish lira. After the Ministry of Environment and Urbanization has confirmed your purchase, you can obtain Turkish citizenship, provided that the title deed records state that at least 400,000 USD or the equivalent in foreign currency or Turkish lira has not been used for three years.

When is the mansion tax paid?

For properties priced over TRY 5 million, the tax is levied from the date of purchase and must be paid within one year of that date. Here we have to note that the tax is considered as an annual tax and the value of the luxury real estate tax in Turkey is paid in two installments. The first part is paid in February of each year and the second part is paid in August of each year.

Under what circumstances can you be exempted from mansion tax in Turkey?

Turkey offers tax exemptions for luxury real estate. In the following special circumstances:

1. If the property burns down or is demolished, or if the property is no longer fit for use, the property is exempt from tax from the date of one of these events.
2. There are also cases where the mansion tax is exempted even if the real property value conditions are met, including the following cases:
3. Turkish apartments and residential real estate owned or licensed by municipalities, universities and housing ministry chairmen are exempt from this tax.
4. If the landowner owns more than one piece of land in Turkey that is eligible for tax vesting, the smaller piece of land will be exempt from this tax by proving that it is his sole residence.
5. If the property has multiple owners, the owner with the smallest share is exempt from luxury real estate tax, provided his share of the property is his sole residence.
6. Residential properties owned by foreign consulates in Turkey and international organizations, such as residences of UN ambassadors and representatives, are also exempt from luxury real estate tax in Turkey.

Finally, condominiums and real estate under construction by construction and real estate companies whose ownership has not been transferred to private companies, including apartments that the developer moves into from the project, are mortgaged, provided that his apartment is not rented out or used, is exempt from the luxury real estate tax.

Many people want to start in the field of real estate investment in Turkey. There are also those who also want to buy high-value properties in Turkey for living space and luxury homes, for real estate investment in Turkey, and even to acquire Turkish citizenship by purchasing a property. If you are one of them, we strongly advise you to always be aware of the tax laws related to real estate that are officially published in Turkish newspapers. This way you can fully understand everything related to real estate, ınvestment and citizenship.