Real Estate in Turkey Property Gains Tax in Turkey

Property Gains Tax in Turkey
Summary: This exceptional article explains how to calculate the Gains tax when you buy a real
estate in Turkey and then sell it before passing five years on the date of the Land Registry
receipt.
According to the Article No. 80 pertaining to the Turkish Income Tax Law, in the case of sale of a
real estate before passing five years on the date of purchasing, the real estate subjects to capital
gains tax on property (for the real estates purchased under construction, the beginning of the
five-year is from the date of the receipt of the Land Registry), excluded from this gains tax the
sold real estates which have been obtained free of charge, namely, by inheritance, donation, or
something like that, in that case the real estate is not subject to the forgoing tax.
The value of property gains tax is calculated according to the Local Producer Price Index.
However, this indicator is issued monthly and for that the value of capital gains tax on property
is not calculated according to the month index on which the real estate is sold; it is calculated
according to the previous month index, here is a simple example to clarify things out:
Let’s say that a real estate was bought in 01/02/2010 at a price of 120,000 Turkish Lira, and then
sold in 01/03/2014 at a price of 200,000 Turkish Lira, while the Local Producer Price Index
proportion of rising was as follows:
01.02.2010 = 166.22,
01.03.2014 = 232.27,