Today, I will continue on the same topic and respond to the remainder of the questions.Who levies and collects property related taxes, the municipalities or the central government?
This depends on the nature of the tax. Certain taxes are collected by the municipality, while others are collected by the central government.
Following the purchase of a property, both the seller and the buyer pay a 3 percent sale/purchase tax to the tax office. Additionally, if the buyer sells this property within five years after the date of purchase, he will be obliged to pay the capital gains tax. The owner of the property must declare the real value of the property to the title deed office during the transfer of the property. However, declaring a lower purchase price and registering the property at less than its real and actual purchase price, although tempting because both parties will pay less for the sale/purchase tax, carries a risk. If there is a difference between the purchase price and the declared value, both parties will be fined.
The risk is higher for the buyer, however, because if the buyer decides to sell the property within five years of the date of purchase and if the price was declared as less than it should have been, the difference between the price at which the property is being sold and the purchase price will be greater, leading to a much higher tax. The capital gains tax ranges from 15-35 percent and this could be costly for the seller. Another point worthy of noting is that if you take out a mortgage on your property, the amount shown on the title deed (tapu) may be of importance to financial institutions.
Municipalities collect the real estate tax, which is calculated on the basis of the declared value of the property at the end of December of the year in which the property was acquired.
Does Turkey have laws addressing delinquency in paying property taxes and/or does it place liens on properties for unpaid taxes?
You may run into some trouble if you do not pay these taxes in a timely manner. Records for properties are now kept in a database and no transactions can be concluded until all pending and overdue taxes are paid with interest. Furthermore, the authorities may start a collections process if the tax is not paid within a predefined period of time. Liens are placed on properties with unpaid taxes.
How do enforcement measures work in reality?
The enforcement of relevant laws is as good as in Western countries; it is taken very seriously. A new system was recently installed that monitors all unpaid taxes and allows tax offices and municipality tax departments to notify property owners with unpaid taxes.
Is it possible to pay my property taxes together with the monthly mortgage payments and for the lender to then take care of paying my property taxes when they are due on my behalf?
This is between you and your bank or mortgage broker. Some of them provide this service while others do not. Real estate tax is paid annually and can be paid in two installments. In 2007, this tax was due on March 1; the first installment needed to be paid by the end of May while the second is due by the end of November. The government will certainly not object if you wish to pay in full.
Some banks even allow for the tax to be paid in monthly installments, if that is a better option for you. You must first notify the bank that you would like to do this, however.
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.
