In recent years, Turkey has become a popular spot for real estate investing, thanks in large part to the country's growing tourism industry and ever-increasing population. Turkey property investors are attracted to Turkey like a magnet right now because the country is positioning itself to possibly be included in the EU (European Union) within the next few years. Much of the Turkey property for sale is available at low, attractive prices that offer promising rewards for those who invest now. Land and home values are expected to increase substantially if and when Turkey becomes a part of the EU, which would give real estate investors who buy now a tremendous return on their investment.
As a potential investor in Turkey property, you might be wondering what to expect in terms of taxes. Are Turkey taxes as high as the U.S.A. or other countries? What type of property is taxed, and how much per year? Are holiday villas in Turkey taxed the same as other homes? Let's examine Turkey property taxes to prepare you for this aspect of your investment.
Capital Gains Tax Incentives
Let's first consider the positive side of Turkey's property tax. There are some beneficial tax incentives if you hold on to your property in Turkey for at least four years. When you sell a Turkey property after owning it for four years, there are no capital gains taxes. If you sell your property before this period, you will be charged a standard rate of between 15 and 35 percent, based on the difference of buying/selling the property.
Property Gifts and Inheritance
If you receive Turkey property as a gift or if you inherit property in Turkey, you'll be taxed between 1 and 30 percent of its value. If you are required to pay taxes in another country on your inheritance, this tax amount will be deducted from the property's taxable value. You may pay inheritance tax over a period of three years, with two payments per year. This gives you time to build a letting income for your property or to develop it for greater profits should you desire to do so.
Turkey Property Taxes
When you make an initial real estate purchase in Turkey, expect to pay a purchase or transfer tax. This is usually 1.5 percent of the price. There's also an annual purchase tax of about 0.5 percent and an annual community tax of approximately GBP 8. The government tax is approximately GBP 100. A stamp duty may be charged when signing your official real estate documents in the amount of 0.15 to 0.75 percent, based on the document's value. Turkey also has a value added tax (VAT), which has a rate of approximately 18 percent.
If you buy Turkey property for sale so you can earn income from rentals, be prepared to pay regular income taxes on your rental income. If you let the property out as a residence and your net rental income does not exceed YTL2,600 for residential properties and YTL4,300 for commercial properties, then your income will not require the VAT.
If you do not live in Turkey and only earn an income on Turkey rental properties, you only have to pay a withholding tax for the rental income. You do not, however, have to file an income tax return in Turkey. Turkey also imposes a property tax on residential properties and land, which ranges from 0.1 to 0.6 percent of the property value. You'll pay more in property tax if your property is located in a metropolitan area.
For more detailed information about buying Turkey property for sale, letting property in Turkey and how the Turkish taxation system works, search online for official Turkey government resources. There are comprehensive websites and downloadable files explaining property taxes in detail. Whether you're interested in Turkey villas, apartments, condos, or resort vacation homes, taxes will play a crucial role in how much profit you can earn. Carefully consider all aspects of your purchase, and seek the help of a real estate agent in Turkey or tax professional to cover all your bases.
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About the Author
Chris Robertson is a published author of Majon International. All Rights Reserved. Copyright 2011 (Wed Nov 11 2009) Majon International. Majon International is one of the worlds MOST popular internet marketing and internet advertising companies on the web. Visit their main business resource internet marketing web site at: http://www.majon.com
