Turkey Capital Gains Tax on Selling Property
This component should not be confused with the 1.5% of stamp duty (which was 2.2% previously) that the client and the retailor pay equally whenever a Turkish property is sold. Turkey Capital Gains Tax that is present on the Turkish Property is an entirely different concept.
If a client wants to sell the property within 5 years that of the original acquisition date, then the Company would recommend checking the date on the Title Deed (TAPU). If you are unsure about the date, then a tax would need to be paid once the property is sold. The margin of tax would be dependent upon how much profit has been gained by this. This is referred to as the Turkey Capital Gains Tax, and the payable amount would be calculated based on the subtraction of the original purchase value of the property from the proclaimed sales value of the property. The profit amount gained by the same would be the amount that would come under the purview of the Turkey Capital Gains Tax.
Sample Rates of Turkey Capital Gains Tax on the Sale of a Turkish Property
The tax rates here are designed very similarly to the Income Tax Rates of Turkey.
- For-profits lower than 6000 Turkish Lira, there would be no Capital Gains Tax.
- For-profits between 6000 – 7000 Lira, the Capital Gains would be 15%.
- For-profits between 7000 – 18000 Lira, the Capital Gains Tax would be 25%.
- For-profits between 18000 – 40000 Lira, the Capital Gains Tax would be 27%.
- For-profits that are over 40000 Lira, the Capital Gains Tax would be 35%.
If you want to resale the property after 5 years, then there would be no tax.
Example Case Study
If you buy a home in Turkey that costs about 200,000 Lira, and you decide to sell the house after 2 years. The value of the house would be at an elevated level than 2 years before, so the resale value of the property would be 217,000 Lira. Now, you have sold the house in less than 5 years, then you would need to pay up the tax on the profits that you earned after resale. You made the profit of 17,000 Lira, which means you need to pay 25% of the CGT. This is a mandatory transaction and should be done irrespective of the nationality. Whether you are a Turkish resident or a non-Turkish, the law applies to all.
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