Who levies and collects these taxes, municipalities or the central government? Does Turkey have laws regarding delinquent property taxes and/or do they place liens on properties for unpaid taxes? How do enforcement measures work in reality? What is the priority for property tax liens -- in particular, do they have priority over mortgage liens? Is it possible that I could pay property taxes together monthly mortgage payments and the lender would take care of sending my property taxes, when they are due, to the tax authorities on my behalf? Thank you very much for your time and professional consideration. -- Anna"Let's take each question separately;
What property taxes are homeowners in Turkey required to pay?
I would like to start with the general rule on equal treatment: There is no difference between foreigners and Turkish citizens in terms of tax rates.
A homeowner in Turkey has to pay an annual real estate tax, which is charged at rates varying between 0.1 percent and 0.3 percent. The percentage changes depending on what kind of real estate it is: Cultivated land, uncultivated land, residential buildings or non- residential buildings. The officially assessed value of Turkish real estate is set on Jan. 1 each year. In metropolitan areas, such as İstanbul, İzmir and Icel, real estate taxes may be twice the normal rates. Besides, there are other taxes that should be taken into consideration, including a value-added tax (VAT) with regard to commercial delivery of residential property. If a property's net area is up to 150 square meters, then it is subject to a 1 percent VAT, if it is bigger then it is subject to an 18 percent VAT.
There are some other types of taxes, duties and mandatory costs you should take into consideration:
Earthquake insurance is mandatory. The owner must insure the property against earthquakes, and the insurance policy must be renewed every year.
Taxes covering garbage removal and neighborhood cleaning are paid by the resident of a property, not the owner. Like real estate tax, it is paid twice a year to the local municipality.
The environment tax is added into your water utility bill every month.
Some homeowners register their houses in the name of a company, but then it is a different story and I would recommend consulting with a tax advisor.
Liability for overdue tax debts
There is a complete database that enables authorities to see if there are any pending or overdue debts and transactions will not be authorized unless the real estate tax clearance is granted by the tax office. This is another point you should be careful about when you purchase a property, because the new owner is also responsible for overdue real estate tax debt.
Next Monday I will write more about the consequences of overdue tax debts.
NOTE: Berk Çektir is a licensed attorney at law and available to answer questions on the legal aspects of living in Turkey. Send enquiries to b.cektir@todayszaman.com. The names of the readers are disclosed only upon written approval of the sender.
DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not just rely on the information in this corner.
