Not to be confused with stamp duty that the buyer and seller must equally pay when a property in Turkey is sold, capital gains tax on the sale of your Turkish property is something entirely different.
If you decide that you want to sell your property in Turkey within five years of the original purchase date (check the date on the Turkish title deed (TAPU) if you are not sure) then you will have to pay tax on the sale of the property.
This tax is known as the Turkish Capital Gains Tax and the amount you pay depends on how much profit you make from the sale. It's calculated by subtracting the declared original purchase value of the property from the declared sales value of the home: the amount of profit made from the sale, is the amount which will be taxed.
Updated Stamp Duty for Property Sales 2024
- Stamp Duty Rate: 4% of the declared sales price.
Source: Turkish Revenue Administration (GİB), Stamp Duty Regulations 2024.
Updated Capital Gains Tax Rates for 2024
- Profit up to 45,000 Turkish Lira: Exempt from CGT
- 45,001 - 70,000 Turkish Lira: 15%
- 70,001 - 180,000 Turkish Lira: 25%
- 180,001 - 600,000 Turkish Lira: 27%
- 600,001 Turkish Lira and above: 35%
Example Case study for 2024:
Suppose you purchased a property for 200,000TL and sold it within two years for 300,000TL, resulting in a profit of 100,000TL. According to the updated 2024 CGT rates, a profit of 100,000TL falls into the 25% tax bracket, so you would pay 25,000TL in capital gains tax.
Source: Revenue Administration (GİB), 2024 Capital Gains Tax Rates.
Do you have to pay double tax in your home country?
One positive thing about Turkey, is that Turkey has a good taxation policy record with numerous countries around the world. This means that you should be able to avoid the double taxation rule, meaning that if you pay the 25% taxes on your profit in Turkey, you won’t be subjected to tax payable when you take the money back to your home country.
Buying a property through a business in Turkey:
Another positive for investors is if you buy a property in Turkey through a business which you run in Turkey, you won’t be subjected to Capital Gains Tax as it is considered part of normal business income and is taxed accordingly as a part of your business in Turkey.
Overall, the Turkish Capital Gains tax works very similarly to other countries around the world. Remember, if you hold on to your property for five plus years, you won’t have to pay tax on the profit and this can help you secure a maximum return on your original investment in Turkish property.
If you have any other questions regarding this or matters similar to this, don’t hesitate to get in touch.
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