Everything you need to know about property rental tax in Turkey

According to the Income Tax Law, income obtained from renting properties and rights mentioned in the law, referred to as immovable capital income, is subject to income tax in some cases.

What is the minimum rental tax in Turkey?

Individuals who receive rental income from real estate are exempt from paying rental tax if their annual income does not exceed the minimum threshold (exemption value) determined by the tax office each year. The minimum exemption from rental tax for 2025 as determined by the tax office is 47,000 Turkish lira. In short, an individual who receives less than 47,000 lira from renting their residential property in 2025 is not subject to rental tax.

Rental tax exemptions in Turkey

Each year, the income department determines the exemption rate for rental income taxes according to various exemptions applied to rental income. These exemptions are deducted from the annual rental income, and the taxes imposed on rental income are calculated by deducting the specified exemption amount for the year in which the income is received. The exemption amounts by year are as follows:

Important information about rental tax exemptions

• If there is a partnership in the property, the exemption applies to each partner's income separately, meaning the specified amount is exempted from the income each partner receives.
• This exemption does not apply to individuals who receive commercial, agricultural, or other professional profits in addition to rental income.
• If the taxpayer receives rental income from more than one property, the exemption applies to only one property.
• The exemption applies to each heir separately if the inheritance has not been divided.

Penalty for not paying rent through bank or post

Anyone who receives rental income from real estate exceeding 500 lira per month, and anyone who rents or leases business premises, must pay and receive rents via bank or postal transfers. If payment and receipt transactions are not made through banks or post, a penalty of 5% is imposed on each transaction, provided that this penalty is not less than the penalties stated in Article 355 of the Tax Procedure Law.

Cases where rental tax is not paid

• Allocating the residential unit by the owner to children, parents, or siblings. However, if more than one property is allocated to each individual, only one property is exempt from the deemed rental value.
• Rentals made by public institutions and administrations with special and general budgets, such as special administrations and regional and provincial municipalities.
• Housing others in vacant properties free of charge for the purpose of protecting them.
• The property owner residing with relatives in the same property.

See also: Steps to rent a property in Turkey.

How is rental income calculated in Turkey?

When calculating rental income tax, the net value of the income obtained from rent is determined in two different ways:

• Actual (real) expense method.
• Fixed (lump sum) expense method.

Taxpayers have the right to choose the method they prefer, but once one of these methods is chosen, it cannot be changed to another method before two years have passed. In addition, the chosen method applies to all their immovable properties.

Fixed expense method for calculating rental income in Turkey

If the fixed expense method is chosen, after deducting the exemption value from the annual rental income, 15% of the remaining income is deducted as fixed expenses. The tax calculation in the fixed expense method is as follows: Annual rental income – specified exemption value = remainder. The actual taxable value = (85% of the remainder). If there is a legal donation, it is deducted from the actual taxable value, and then tax is imposed on the actual taxable value according to the tax brackets (shown below) as follows:

Tax amount = actual taxable value x tax bracket.

If there are other mentioned deductions, they are subtracted from the tax amount, and finally, stamp duty is added to the remaining value (672.4 lira for 2025).

Calculation example: If the total rental income for a residential unit for someone in 2025 is 150,000 lira, then the calculation of rental income tax using the fixed expense method is as follows:

 150,000 - 47,000 = 103,000 lira, which represents the remainder.

 103,000 * 0.85 = 87,550 lira, the actual taxable value.

 87,550 * 15% = 13,132.5 lira, the imposed tax.

 Stamp duty is added to the remaining value (672.40 lira for 2025).

The application of the tax bracket and exemption value varies according to the income of the taxpayers.

What expenses are not considered in rental tax in Turkey?

• Lighting, heating, water, and service expenses for the rented residential unit.
• Management expenses for the rented residential unit.
• Insurance expenses related to the rented unit.
• Depreciation value of the rented residential unit.
• Taxes and fees related to the rented residential unit.
• Interest accrued on the residential unit.

Deducting purchase cost from property rental tax

If the actual expense method is chosen, 5% of the property's acquisition value is deducted from the rental income tax for 5 years from the date of acquisition, and this applies to only one property. Example: Suppose someone bought a property for 300,000 lira and receives an annual rental income of 60,000 lira. Then (300,000 x 5%) 15,000 is deducted from the taxable rental income (60,000 – 15,000) = 45,000 taxable rental income.

Deducting loan interest used to purchase the rented unit from tax

If the actual expense method is chosen, only the interest resulting from loans used to purchase the rented property is deducted from the tax. Example: Suppose someone receives 60,000 lira as annual rental income from a property and has paid 10,000 lira as annual interest for a loan used to buy the property, then the interest value is deducted from the taxable income (60,000 - 10,000) = 50,000 taxable income.

Many legally donated amounts to public institutions subject to general and special budgets, such as health and educational institutions, dormitories, orphanages, homes for the elderly, and other religious institutions, are also deducted.

The calculated tax amount is paid in two equal installments in March and July of each year to the relevant tax office or to other tax offices or to authorized bank branches for tax collection.

Other important information and topics, learn more:

• Comprehensive information about luxury real estate tax in Turkey.
• What is the rate of real estate tax in Turkey?
• What are tourist properties in Turkey and what are their features?

Edited by: Imtilak Real Estate©