Information on Tax on luxurious real estate in Turkey

2024-02-16

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Tax on luxurious real estate in Turkey
Exemption from real estate tax in Turkey

Tax on luxurious real estate in Turkey

A luxury real estate tax in Turkey ( Degerli konut vergisi) is a tax imposed by Turkish tax laws on every property used for residential purposes, A specific amount is determined annually

According to Act No. 7194 and the amendments to the Land Tax Act No. 1314: "The collection of the valuable house tax has been imposed on all Turkish properties located within the borders of the Turkish Republic, which has the status of" abode, "with a high value of 5 million Turkish lira or more.

Under amendments to Act No. 7194; This tax has been levied on real estate that meets the requirements, starting in 2020.

The status of this tax was further amended by article 24 of the Land Tax Act, which delayed the introduction of the valuable home tax until 2021. The tax was reported and published in the Official Gazette on 15 January 2021.

Read also our article on real estate tax cuts in Turkey

The subject of tax - value of tax - Concept of property bearing the status of a home

The subject of the tax will be properties in Turkey within the borders of Turkish territory, which has the status of a dwelling, And its prevailing value exceeds the specified value, including real estate tax.

The value of the tax will be imposed on real estate in excess of the limited value, starting from the year following the year in which its value exceeded the limit, so the tax assignment for properties that exceeded the value in 2020 will be in 2021.

The concept of "property as housing" includes each residential building, which forms a separate part of the estate, as well as every separate part of the buildings containing one or more separate parts, meaning that the parts of the independent housing estate, the value of which is calculated separately, are each part by itself.

The queue records of the real estate parts are considered to determine whether or not they bear the status of the housing.

For more, you can read our article about the title deed in Turkey - everything about the title to the property.

Subtraction and Ratio

The tax release of the valuable house tax will be the "tax value of construction," defined in accordance with section 29 of the Real Estate Tax Act:

(The value of the valuable house tax is determined on the basis of the cost of the square meter of construction, which is jointly determined by the Ministry of Finance and Treasury, the Ministry of Environment and Urbanization, as well as the value of the land share of the property determined, in accordance with the due process of the tax by the assessment committees).

The value of the housing tax for all real estate realized in 2024 will be as follows:

Value of the property		Estimated property tax rate 2024
From	To	Estimated property tax rate 2024
1.288.000 TL	19.321.000 TL	3 per 1,000
19.321.000 TL	25.763.000TL	6 per 1,000
More than 25.763.000TL		10 per 1,000

The tax will be calculated for housing properties that meet the requirements, in which more than one shareholder is available, based on the total value of the housing property.

Tax assignment - place and time of payment

The valuable home tax is paid by the owner of the housing estate, the holder of the tax terms, or the owner of the right of use of the property, and in the absence of them, by the owner of the property, and if the property is owned by more than one owner, each owner pays a portion corresponding to the proportion of his or her share of the property.

Taxation begins one year after:

The date on which the tax value of real estate mentioned in article 42 of the Real Estate Tax Act exceeds the value of the housing tax limit, which is (It amounts to 1,288,000 Turkish Lira in the year 2024
The date of a change in the tax value of the property is due to one of the obligations of a change in the tax value of real estate mentioned in section 33 (1) to (7) of the Real Estate Tax Act, the most important of which is in relation to housing.
Adding an attachment to the construction (including the addition of an elevator to the construction, or the addition of central heating structures).
Completely changing the shape of building use.

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Date of exemption from luxury real estate tax in Turkey

All properties that are burned or demolished, or that are not fully fit for use, or that fulfill the reason for the exemption from the property tax, shall be exempt from the housing tax and shall enter into force from the date of the event.

The valuable housing tax statement for taxable real estate in the municipality concerned is submitted between 1 and 20 February 2024 and then submitted to the respective tax service. The final date for the presentation of tax data will be 20 February 2024

The property tax pays the values due in the respective tax service, in two installments of equal value, one paid at the end of February, and the other in August of the same year.

Exemption from real estate tax in Turkey

The housing estates listed below are exempted from the valuable housing tax, even if they meet the value requirements:

All apartments in Turkey owned or used by departments with a private or public budget, municipalities, universities, and the head of the housing department are exempt from the valuable housing tax.
For those who own more than one property, an investigator of the conditions for the assignment of valuable housing tax within the borders of the Republic of Turkey, the smallest real estate realized shall be exempt from the terms of the assignment, provided that it is the sole residence of the owner or owner of the right to use it.
The owner of the lowest-value share of the property in question is exempt from the tax requirements if his share of the property is his sole residence.
All properties belonging to foreign countries, used as residences for ambassadors and consulates, and those belonging to international institutions operating within the borders of the Turkish Republic shall be exempt from this tax.
Residential properties in Turkey that are under construction, held by companies operating in the construction sector, have not been sold or owned for the first time, including housing properties acquired by the contractor in exchange for a construction undertaking, (provided that these housing properties are not leased or used in any way).

Also, read in our article; prices of apartments in Turkey 2021 and factors affecting them.

It is stated that the realization by the housing estate of the valuable housing tax requirements does not exempt it from the real estate tax. This tax is paid in addition to the real estate tax due on the property.