Real estate transaction costs and taxes in Turkey

Cost

Free of charge (to verify payment of real estate taxes and identify current value). Variable depending on the municipality (for zoning status search).

VAT

Nil

Cost

N/A

VAT

Nil

Cost

Unofficial online search free of charge. Costs of official documents vary depending on the type of documents requested (usually app. EUR 2 to EUR 8)

VAT

Nil

Cost

Unofficial online search free of charge.
Variable depending on the type of documents if official documents requested (usually EUR 2 to EUR 10).

VAT

Nil

Cost

Negotiable but subject to minimum fees set forth by the Capital Markets Board on an annual basis (such minimum fees are variable depending on the type of property (land, residential, commercial etc.) and area of the property in square metres).

VAT

18%

Cost

Negotiable but subject to minimum fees set forth by the relevant Chamber of Turkish Engineers and Architects.

VAT

18%

Cost

Minimum of approx. EUR 30 (excluding additional fees).

Cost

N/A*

*In the event that the parties sign a promise to sell agreement (“PSA”), they must sign the SPA before public notary. The PSA will not transfer the title but will include a promise to transfer the title upon the fulfilment of certain conditions. The notary costs of the PSA vary depending on (i) the number of originals, (ii) number of parties and (iii) number of pages of the PSA. PSA can be registered with the land registry to shield future purchasers from third party claims on title. Such registration is subject to a land registration fee equal to 0.683% of the highest amount under the PSA.

VAT

Nil

Cost

Negotiable

VAT

18%**

**Legal services rendered to Turkish parties are also subject to withholding tax at the rate of 20%.

Cost

1. Variable depending on the area of the real property in square meters (for residential real estate sale conducted as commercial activity).
2. Land, offices and other commercial property.

VAT

1. 18% if net area is larger than 150 m2/1% to 18% if net area is smaller than 150 m2 (depending on the location of the property value of the land per m2)
2. 18%

Cost

4% of the purchase price declared to the land registry (payable by each of the seller and the purchaser equally).

No transfer duty and transfer tax, stamp duty at the rate of 0.948% of the highest amount under the share purchase agreement (capped at approx. EUR 496,000 as of 14 January 2020.)

Individuals: Income tax at the rate of from 15% to 40% depending on the amount gained. No taxation if the individual owned the real estate for more than five years.
Legal Entities: Corporate tax at the rate of 20%. In general, 75% of the capital gain is deductible from corporate tax if the entity owned the real estate for more than two years. Certain companies (e.g. financial leasing companies, asset management companies) may fully deduct without the need to hold the real estate in their assets for two years if certain conditions are met.

Individuals: Income tax at the rate of from 15% to 40% depending on the amount gained. No taxation if the individual owned the shares (except partnership shares) for more than two years. Legal Entities: Corporate tax at the rate of 20%. 75% of the capital gain is deductible from corporate tax if the entity owned the shares for more than two years.