The sale of real estate requires the payment of tax at certain rates according to tax legislation. This tax rate varies according to the date of sale and the value of the property.
The tax levied on the sale of real estate can be analysed under two main headings: VAT and title deed fee. The VAT rate is determined as 1% or 8% and the title deed fee rate varies according to the value of the property.
The VAT rate varies according to the intended use of the property, the date of sale, the characteristics and location of the property. If the intended use of the property is residential, the VAT rate is usually applied as 1%, while for properties used for commercial purposes, VAT is applied at a rate of 18%.
The title deed fee varies according to the value of the property. As the value of the property increases, the title deed fee rate also increases. For example, if the value of the property is up to 250 thousand TL, the title deed fee rate is applied as 2%, between 250 thousand TL and 1 million TL, 4%, and over 1 million TL, 6%.
Tax rates on the sale of real estate may also vary depending on the date of sale. As of 2021, 35% income tax is paid for properties held for less than one year, while 15% tax is paid for properties held for more than one year. These tax rates also apply to property used for commercial purposes.
As a result, taxes paid on the sale of real estate can be analysed under two main headings: VAT and title deed fees. Tax rates vary according to the intended use of the property, its value, the date of sale and the holding period. It is important to get detailed information about the tax rates before the sale and to realise the sale transaction in a healthy way.