The taxation system and the kinds of taxes related with the property are below;
Garbage removal & Environmental taxes
The garbage removal and cleanup tax is paid by residents of a property and not the owner. Like real estate tax, it is paid twice a year to the local municipality. The environment tax is added to your water utility bill every month.
Tittle Deed Transfer Tax
The title deed transfer tax is paid when the ownership of a property is transferred to someone else. It was 3 percent for years and was recently raised to 3.3 percent and then again to 4 percent. In any case, on the purchase of a property, both the seller and the buyer have to pay 4 percent transfer tax (purchase/sale) to the tax office. Note this is not 4 percent for both parties, but the buyer and seller pay 4 percent of the value of the property in total.
Value-Added Tax
If you are buying a brand new house from a construction company, you need to know how much value-added tax (VAT) you are paying. The level of VAT should be taken into consideration in terms of a VAT percentage with regards to a commercial delivery of a residential property. If a property’s net area is up to 150 square meters, then it is subjected to 1 percent VAT; if it is bigger then it is subjected to 18 percent VAT.
Capital Gain Tax
The capital gain tax is applied to any profit made on the sale of a property within five years following the purchase date.
The owner of a property is supposed to declare its real value during the transfer of said property at the Title Deed Office. However, declaring a lower purchase price and registering a property at a value below its real and actual purchase price is tempting for both buyer and seller. This saves 4 percent of the price. In other words, both the seller and the buyer end up not paying a big part of the 4 percent purchase/sale levy by declaring a lower value on the deed as the purchase price. This should never be worth it when you think about the risks involved. If the tax office finds out that there is a difference between the purchase price and the declared value, both parties will be fined, will have to pay the difference between the tax paid and how much should have been paid, penalty amount and on top of that interest will be applied to the difference.
The risk is higher for the buyer than the seller if tax evasion is in question. This is because if the buyer decides to sell the property within five years from the date of purchase, and if the purchase price was declared to be lower than it was, the difference will be much higher than it should be and this will cause the amount of the tax owed to be much higher. The capital gain tax ranges from 15 percent to 35 percent for gain, and this might be costly for the person who buys a property at a false value.
Annual Property Tax
A homeowner in Turkey has to pay an annual real estate tax which is charged at rates varying between 0.1 percent and 0.3 percent. The percentage depends on what kind of real estate it is related, whether it is cultivated land, uncultivated land, a residential building or a non-residential building. The officially assessed value of Turkish real estate is made on Jan. 1 of each year.
Municipalities collect real estate tax, and tax is calculated on the basis of the declared value of the asset by the end of December in the year of acquisition.