Understanding the Tax Obligations When Buying Property in Turkey Under Turkish Law
Understanding the Tax Obligations When Buying Property in Turkey Under Turkish Law
08.12.2025
Primary Taxes When Purchasing Property in Turkey
Under Turkish law, property buyers are subject to several transactional taxes that arise at the point of transfer. These obligations apply regardless of nationality and are calculated according to the declared value registered at the Land Registry. The principal items typically include the tapu harcı (title transfer fee), potential VAT where applicable, and certain municipal charges linked to the property’s location.
The tapu harcı is governed by Law No. 492 on Fees (Harçlar Kanunu) and its attached tariff. As of the time of writing, the title transfer fee is currently calculated at a total of 4% of the declared transfer value, under the relevant tariff, with the rate subject to change through Official Gazette updates. In practice, although the tapu harcı is legally a shared obligation between buyer and seller, it is commonly borne in full by the buyer, particularly in residential transactions. This reflects market practice rather than a statutory requirement, and the parties remain free to agree on a different allocation in the sale contract. The Land Registry will not finalise the transfer until the full fee has been settled through the official payment system linked to the Tapu offices.
VAT may arise in certain residential or commercial sales when the seller is a VAT-registered entity, and the project characteristics fall within the scope of the Turkish VAT regime. Transactions carried out by private individuals who are not VAT taxpayers are generally outside the scope of VAT. Each transaction must therefore be assessed to determine whether the supply is taxable or exempt, as VAT obligations depend on the seller’s status and the nature of the property.
Municipal charges, including the compulsory earthquake insurance (DASK), form part of the financial prerequisites before transfer. These payments are required to validate the Land Registry appointment and to confirm that the property meets the basic regulatory requirements at the time of acquisition.
Tapu Harcı (Title Transfer Fee), VAT, and Other Transaction Charges
The tapu harcı is the central cost at the point of transfer and is imposed under Law No. 492 on Fees. The fee is calculated on the declared transfer value and is payable before the Land Registry finalises the transaction. As noted earlier, the current practice applies a total rate of 4%, although this may change through Official Gazette updates. Buyers and sellers may agree to divide this cost equally, but the allocation remains a matter of private agreement rather than a statutory rule.
VAT applies when the seller is a VAT taxpayer, and the sale falls within the scope of the VAT Law. Developers, construction companies, and commercial sellers generally fall within this category, and their supplies may attract VAT at statutory rates depending on the characteristics of the property. By contrast, individuals who are not VAT taxpayers typically fall outside VAT obligations when selling a residential unit, subject to exceptions in specific circumstances. It is therefore necessary to determine the tax status of the seller to assess whether VAT is payable.
In addition to the title transfer fee and any VAT, several ancillary charges arise during the registration process. These may include Land Registry service fees, notary fees for powers of attorney when the transaction is conducted through a representative, and mandatory earthquake insurance (DASK) if the property contains a building. Certain municipalities may also require confirmation that outstanding property tax liabilities have been settled before the appointment is completed. These items, although smaller in amount, form an essential part of the financial preparations for transfer. For a detailed explanation of tapu stages, you may refer to our internal guide: Tapu Process in Turkey: A Step-by-Step Guide for Foreign Buyers.
Ongoing Tax Obligations After Acquisition
Once the property transfer has been registered, you become subject to several ongoing tax obligations under Turkish law. These obligations apply whether the property is used for personal occupation, rental, or commercial activity. The primary items include annual property tax, mandatory insurance renewals, and potential income tax liabilities where the property generates rental income.
Annual property tax is administered by the relevant municipality and is calculated based on the property’s tax value. Rates vary depending on whether the property is classed as residential, commercial, or land, and may be subject to increases through annual revaluation. Payment is typically due in two instalments each year. While the municipality records ownership automatically following registration, it remains advisable to confirm that the property is correctly listed to avoid penalty charges.
If the property is rented out, rental income may give rise to income tax under the Turkish Income Tax Law. The applicable tax liability depends on the amount of rental income, available exemptions, and allowable deductions, such as the statutory lump-sum expense method or documented expenses. As these thresholds and rates are reviewed annually, it is important to confirm the applicable figures for the relevant tax year.
Owners of properties containing buildings must also maintain compulsory earthquake insurance (DASK). The policy must be renewed annually, and an up-to-date policy is required for certain utilities and administrative procedures. Although DASK is not a tax, it remains a statutory obligation associated with property ownership and therefore forms part of the ongoing compliance requirements for foreign and domestic owners alike.
How the Tax Process Works During and After Transfer
The tax process for property acquisition begins before the Land Registry appointment, as the title transfer fee and any applicable VAT must be confirmed and prepared in advance. The Tapu office verifies outstanding payments through its electronic system, and the transaction cannot be completed until all mandatory charges have been settled. This ensures that the Registry records the correct declared value and applies the applicable tariff under Turkish tax law.
During the appointment, the Land Registry officer reviews identity documents, the sale agreement, and proof of payment for the tapu harcı. Once verified, the officer finalises the title transfer and records the new owner in the Land Registry. This registration triggers certain administrative updates, including the automatic notification of the relevant municipality for property tax purposes. Buyers should nevertheless confirm the registration to avoid delays in future tax assessments.
After transfer, ongoing tax obligations arise depending on the property’s use. Annual property tax will fall due in accordance with municipal procedures, and the owner must also maintain a valid DASK policy for properties containing buildings. Rental income, where applicable, may give rise to income tax, and thresholds must be reviewed each year to determine the correct filing obligations.
Where the buyer is a non-resident, additional administrative steps may be required for tax declarations, including obtaining a Turkish tax number and ensuring that revenue generated in Turkey is declared in accordance with domestic rules. These steps are procedural rather than transactional, but they form an important part of the post-acquisition compliance process under Turkish tax legislation.
FAQ
Do foreign buyers pay different taxes when buying property in Turkey?
Under Turkish law, foreign and domestic buyers are subject to the same taxes during property acquisition. The key items include the tapu harcı, potential VAT, and certain municipal charges, all calculated according to standard national rules.
Is VAT always applicable to residential property purchases?
VAT only applies when the seller is a VAT-registered entity, and the transaction falls within the scope of the VAT Law. Sales by private individuals who are not VAT taxpayers are generally outside the VAT regime, subject to statutory exceptions.
When are tapu harcı and related charges paid during the transfer?
These charges must be paid before the Land Registry completes the title transfer. The Tapu office verifies all payments electronically, and the transaction cannot proceed until the full amount has been settled.
Summary
Understanding the taxes when buying property in Turkey requires careful consideration of the title transfer fee, potential VAT, and ongoing municipal obligations. Under Turkish law, these liabilities arise at different stages of the transaction and depend on the characteristics of the property and the status of the seller. Once ownership is registered, annual property tax, compulsory insurance obligations, and possible rental income tax must be monitored. As many numerical thresholds are updated each year, buyers should verify the latest figures under the current Turkish tax law before completing the transaction.
For professional legal assistance with your property, company, or maritime matters in Turkey, contact Gokalp Legal.
This article provides general information and does not constitute legal advice.
