Wednesday, March 16, 2011

Taxes when selling you Tyrkish holiday home

’How much do I have to pay in taxes when selling my Turkish holiday home?’. This is one of the most common question people often ask. In the following we will sum up the answer.

In the case that you have owned your property for MORE than five years, the profit you earn from the sale will be tax free.
An important note is that the length your ownership is determined from the day you received your deed. When you have paid for the property, signed the contract or moved in, is irrelevant in this case. Only the date on the deed can determine when you became the official owner.

In the case that you have owned your property for LESS than five years, you must pay taxes if the sale brings you any profit. The tax amount will be conducted from the following values (notes this is 2010 values):
Profit up to 8.800 TL, 15 procent
8.801 - 22.000 TL, 20 procent
22.001 - 50.000, 27 procent
More than 50.000 TL, 35 procent
The profit is the balance between the registration value on the deeds issued to the seller and the new buyer.

Be aware of the following aspect
Even though your property is sold with a loss, it is in general not accepted to downsize the registration values on the deed at a sale. This means that even when your property is sold with a financial loss, you will often experience a fictive profit. Therefore it is important that you before deciding on selling make sure that, you have information on what the authorities will demand the registration value to be when the property is sold. This way you can calculate how much you must pay in taxes.

Whether or not your sale brings you a real profit or a fictive profit, it is custom that taxes won’t be paid in Turkey. And oddly enough the authorities will not claim the missing tax payment.
For us Europeans this can seem strange and difficult to understand. Never the less the fact is that most private persons do not pay the tax, and the authorities keep no records on people or claim the money.

When it all comes down to it, it is in a way fair enough since many properties at the moment often will be sold with a loss and therefore no real profit.

This blog-post is written by 2Base Estate Agency & My2Base Holiday Homes
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