Capital Gains Tax from Turkish Real Estate Sales

Capital Gains Tax from Turkish Real Estate Sales

Turkey is a country that is highly developed in terms of the real estate sector. In this context, there may be various points that many people wonder about Turkish real estate sales. Especially in Turkey, which is one of the most frequented addresses of foreign investors, there are many issues that domestic citizens and foreign nationals are curious about capital gains tax.

The only condition for being an income taxpayer in Turkey is to reside in Turkey. Whether you are a Turkish citizen or a foreign citizen, if you reside within the borders of Turkey, you will be considered as an income taxpayer. One of these taxes is expressed as capital gains tax. So, what is capital gains tax?

We have prepared a guide that will answer all your questions about capital gains tax, which has an extremely important place in the Turkish real estate sector. Now let's check this guide in detail together.

What is Capital Gains Tax?

In case the real estate sales continue and this activity is carried out within a commercial organization, the earned income is taxed as commercial income. Earnings arising from the disposal of real estate are taxed as gains appreciation, provided that they are not sustained and are not made within a commercial organization. However, depending on the fulfillment of certain conditions, taxation may not be applied for earned profits. All capital gains from the sale of the property are exempt from income tax if the property is held for more than 5 years and acquired after 1 January 2007.

The acquisition of real estate acquired before 2007, four years after the date of disposal, is not taxable in this Income Tax, regardless of the amount of profit, capital gain, as stated in the five years following the lawsuit. In addition, since the amount of income related to the taxation of sales earnings must exceed the exemption amount determined for the year of the sale, no declaration is given if the profit does not exceed the exemption amount, return for other revenues, real estate sales gains are not included in the declaration.

 Likewise, the gains from the disposal of real estate acquired free of charge without any limitation of ownership period are not taxed as appreciation earnings, provided that they do not fall within the scope of commercial gain.

Capital Gains Tax for Foreign Investors

25% tax is paid on the income you get from real estate in Turkey. In this case, you will be subject to additional income in your home country. After receiving your title deed, there will be no tax payable in the first year. However, you should start paying taxes by the end of the first year. Also, if you sell your home for the first 4 years, you must pay the first year tax.

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