Property Rental Income TAX In Turkey

Property Rental Income TAX In Turkey

How much is property rental income TAX in Turkey?

How to calculate property rental income TAX in Turkey?

Do I need to pay rental income TAX after renting out my property in Turkey?

Property Rental Income TAX In Turkey

When a person would like to rent out their property in Turkey, they are supposed to pay tax and the tax rate depends on the rental price of the property. Until the end of every March, the property owners should declare their incomes to the tax office. There are scales of specific annual rental price ranges. The rental income tax rate depends on which price range your income is in. The rates are as follows:

Up to 18.000 TL: 15%
18.000 TL – 40.000 TL: 20%
40.000 TL – 98.000 TL: 27%
98.000 TL – 500.000 TL: 35%
More than 500.000 TL: 40%

Every January, the annual taxation price range scale is announced by the government. Last update: 02.01.2020

Example property rental income tax calculation; Suppose you rent out a shop for 15.000 TL monthly rental income. You have a yearly income of 180.000 TL:

15% of the first 18.000 TL: 2.700 TL
20% of 22.000 TL: 4.400 TL
27% of 58.000 TL: 15.660 TL
35% of 82.000 TL: 28.700 TL
You pay totally 2.700 + 4.400 + 15.660 + 28.700 = 51.460 TL property rental income tax for 180.000 TL yearly income.

If you rent out this commercial property to a tenant who fully declares the rental agreement, the tenant already pays 45.000 TL on behalf of you as a stoppage (withholding tax) to the tax office. In this case, you pay 51.460 TL – 45.000 TL = 6.460 TL.

The tenant wants to avoid paying a high stoppage tax, they would like to declare a lower rental amount which might be disadvantageous taxation for the owner.

If the property is residential, the tenant does not pay any stoppage tax, therefore the owner pays full tax.

There is an easy way to calculate yearly rental income tax from the below link;

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