All capital gains that you make from the sale of your property are exempt from income tax, if you have held the said property for longer than five years or four years, if the property was acquired before 01 January 2007. If you have owned the property for less than five years, normal income tax rates apply. You are required by law to declare income on a yearly basis with Income Tax declaration. You can easily calculate your capital gains by deducting acquisition costs from the selling price, which is subject to inflation adjustment. The producer price index is taken as the basis for inflation adjustment. While calculating earnings to be taxed, “expenses incurred due to the sale and which have fallen under the responsibility of the seller”, and “Taxes and charges paid” are separately deducted in addition to the property’s cost. For the year 2016, an annual exemption rate of 11.000 TL should also be deducted from the final amount to calculate the exact amount of capital gains tax, which is payable in two equal installments in March and July.
If you pay 25% tax on your profit in Turkey, you won’t be subjected to additional taxes in your home country. If you buy a property in Turkey as an individual shareholder of a business in Turkey, you won’t be subjected to Capital Gains Tax, because this gain will be considered as part of your regular business income and will already be taxed accordingly. Your Turkish company holding a property in Turkey will be subject to Corporation Tax at the rate of 20% over its annual income. If, as a non-resident shareholder, you decide to sell your shares in the Turkish company, capital gains are subject to tax. If you have bought a brand new home in Turkey, you have up to one year, effective from the date on the title deed, in which you can sell your home without paying any tax. However, after this one-year grace period, you will have to pay tax if you sell the property within the next four years.