See here ... https://www.turkeyhomes.com/info/buyers-guide/annual-running-costs-for-a-property-in-turkey ... and ... as at 19th January 2018 QUOTE nnual property costs: Residents will have to pay council tax as well as other standing charges, such as environmental tax. These can be paid annually, or twice yearly. For 2018, council tax will rise by 7.25 percent, while the environmental cleaning tax increases to 32 Krus per 1 cubic meter of water consumption.
Thanks for reply. My understanding is capital gains tax is not payable after 5 years although I have been told it is now 3 years. I was under the impression that when a property is bought a tax of 4% of the purchase price is paid to the council or Tapu offece.
There's a 4% land/stamp duty tax which has to be shown as paid before the tapu is issued. The amount is calculated by the tapu office when you make the appointment to complete the transaction and you pay into a designated bank account and take the receipt with you to your appointment.
Capital gains tax (CGT) is paid on sale within a set time, you say 3 yrs. Dont forget that unless the Turkish house is your main residence CGT will be payable in UK on any gain above the CGT allowance, currently £11,500. If you own jointly you can each use the CGT exemption allowance.
Other expenses can also be offset against the gain such as building improvements etc but it's a minefield and worth using an accountant.
That's correct, property transfer tax is 4% on the actual value of the transfer. Be aware that Turkish custom and practice is to evade tax by declaring a lower amount. Developers and solicitors not averse to doing just that so make sure the Tapu shows the correct figure before you sign.
We were given to understand that the belediye valuation is based on their council tax bandings, which are usually lower BUT, be warned, if the buyer is using a bank loan or mortgage to buy, the full purchase price will be entered on the tapu to protect the lender, and the tax paid on the declared price. The lender's lawyer will also attend the tapu office with you to make sure their charge is registered.
It's quite usual for buyer and seller to split the tax.
If your buyer is going to use a lender, make sure you agree your share of land tax excludes the loan amount.
This where a good emlak/lawyer can be helpful.
Also I thought I read somewhere that the local Belediye set the value ( tax wise) on the property ?.
The Belediye doesn't actually set the value of the property to be shown on the new Tapu that goes to the Buyer.
The Seller (or Seller's Agent) must apply for a Beyanname (No Debt Certificate), to submit with all other relevant paperwork to the Tapu Office at time of Completion of Sale and Tapu transfer to the Buyer.
All Council Taxes must be paid up to include the year in which the property is being transferred to new ownership before the Beyanname is handed over.
On this Beyanname, the Belediye will include a figure declaring the MINIMUM value to be declared on the next Tapu. The Tapu Manager normally discusses this figure with the Buyers and their Agent (if they have one), and a figure to be declared is agreed.
The 4% Tax is payable on whatever figure is to be declared on the Tapu.
The Tapu Office manager will send a message to the Buyer's mobile later in the day that all paperwork has been submitted, telling how much Tax is due.
The Tax is paid normally at Halk Bank or Ziyaaret Bank, receipt of payment then taken back to give in at the Tapu office and the new Tapu is normally ready just 20 or 30 minutes later.
You describe exactly my experience when I first purchased in 2008. I went armed with my contract and had to argue my corner in order to have the contract price on the Tapu and pay the correct tax. Afterwards when I asked my lawyer why the Tapu office were colluding with the seller to enter a lower price and avoid tax he replied ‘’welcome to Turkey’’.
Anyone in doubt about the legal and tax position of under-declaring the sales price should read the excellent article written by attorney Atilla Camli back in 2008 and published in the newspaper Didymian, at a time when the transfer tax was 3%.