Along with Articles 30-37 of Law No. 7194, Articles 42-49 have been added to the Property Tax Law No. 1319 and a new tax titled the “Valuable House Tax” was introduced to Turkish legislation.
This amendment imposes special taxes on residential immovable properties located in Turkey with a value exceeding 5 million Turkish Liras. The value of the property is determined based on the property’s tax value as defined in the Property Tax Law or the value determined by the General Directorate of Land Registry and Cadastre. The tax base is either the property tax value or the value determined by the General Directorate of Land Registry and Cadastre, whichever is higher.
The tax rates for Valuable House Tax are dependent on the value of the residential immovable property:
- Between TRY 5,000,000 and TRY 7,500,000 (0.3%)
- Between TRY 7,500,001 and TRY 10,000,000 TL (0.6%), and
- Properties exceeding TRY 10,000,0001 (1%)
The taxpayer responsible for the Valuable House Tax is the owner of the immovable residential property, the holder of any usufruct rights, or, if neither exist, those who possess the property as if they were the owner. The total value of the property is taken into consideration when calculating the tax base regardless of whether the property is under shared ownership or joint ownership.
The taxpayer must declare their Valuable House Tax to the tax office of the Revenue Administration in the jurisdiction where the property is located. The tax is due on February 20th of the year following the year the value of the house exceeded TRY 5 million and must be paid in February and August in equal installments.
Properties that are exempt from the Valuable House Tax are as follows:
- Residential immovable properties or usufruct rights owned by general and special budget administrations, municipalities, and universities
- For individuals who own a single residential property within Turkey:
1. Persons who can evidence that they have no income (excluding individuals under the age of 18 with a legal guardian who provides for their financial needs), or
2. Persons whose income consists of a monthly pension from the Social Security Institution (including usufruct right holders)
- Residential immovable properties owned by Foreign States that are used as embassies, consulates, or residences for ambassadors; residential immovable properties belonging to representatives of international organizations located in Turkey; and international organizations with their headquarters in Turkey, and
- Newly built residential immovable properties registered to enterprises whose main activity involves construction that have not yet been subject to initial sale, transfer, or assignment
The Valuable House Tax entered into force on 07.12.2019 with the publication of Law No. 7194