Among all the cities of Turkey, Istanbul is the most populous, and there are many things that this modern city can offer — a rich history, diverse populations, a fast–developing industry, and a growing real estate sector. If you own property in Istanbul or are thinking of investing in such a place, knowing how the property tax sphere works is quite important. This is because everyone who deals in real estate buys commercial as well as residential property in Istanbul inclusive of property taxes. In this post, you will learn the basics of the tax system, how much you will have to pay in this case, and what makes the rates vary.
Overview of Property Taxes in Istanbul
The property tax in Turkey is provided by the property tax law and the practice rates differ according to the area of the property in question. As Istanbul is a metropolitan municipality, its property tax rates are similar but not identical to other regions. The tax applies to residents as well as foreign residents and is paid on an annual basis by all of them.
Property tax is imposed on properties by municipal treasuries based on the assessed or taxable value of the property as released by local municipal authorities. This value is typically less than the market value of the property but still constitutes a good weight of the property. The property tax rates are prescribed as a percentage of this assessed value.
Istanbul Property Tax Rates Overview
In Istanbul, the general property tax rate can be summarized as follows:
- Houses: 0.2% of their taxable value
- Shops and other businesses: 0.4% of their taxable value
- Empty lots: 0.3% of their taxable value
- Lands earmarked for construction: 0.6% of their taxable value
These rates are payable on an annual basis and may be subject to periodic changes or modifications. Nevertheless, since Istanbul is a metro city, property tax rates are higher as compared to smaller municipalities where the rates are usually low in nature (for example; 0.1% for houses).
Elements That Influence Property Tax Rates
Numerous factors can influence the amount of property tax payable by a resident of Istanbul:
Geographical Position:
The taxable assessment of property also varies within the city of Istanbul according to its surrounding areas. The taxable rate for properties within the primary locations such as Besiktas, Nişantaşı, or Levent will be particularly higher than other locations simply because of their attractiveness and demand in the real estate market.
Nature Of Property:
As demonstrated above, differing property types – residential, commercial, or land, for example, – will have differing tax rate levels. Commercial properties and land usually impose the highest tax charges.
Purpose of Holding Property:
Let us assume a case where a residential apartment is utilized for business purposes. In such a case, it is possible that the rates may rise in accordance with the residential apartment’s classification as a business entity.
Reports On Property Owned By The Charity:
The constituent territories or republics within the country’s federation sometimes conduct a new assessment of existing real estate property. If the re-evaluation of the lease changes and becomes more expensive than the previous one, then it will follow that the tax for that property will also increase.
Tax Exemptions and Discounts
Some kinds of exemptions and discounts are attachable to particular categories of people:
- Retirees, widows, and handicapped persons would normally qualify for property taxation waivers or reduced rates particularly when the property in question is their single residential house.
- First-time buyers would also qualify for reduced rates or even exemptions in some instances.
It will also be prudent to consult the local authorities if you qualify for any of these benefits.
Conclusion
Among other factors that any person who already owns or plans to buy property in Istanbul has to consider, property tax is also essential. The rates in question are low compared to other parts of the globe, but it is important to know the taxable value of your property, the relevant rates, and when exactly the tax needs to be paid. This way, you will avoid unnecessary penalties concerning these obligations and enjoy property ownership in one of the most vibrant cities on earth with ease.
