Renting Out Your Investment Property in Istanbul

Once you've purchased an investment property in Turkey, you have the right to rent it out. There are three types of rentals, each with different rules and procedures:

• Commercial Purpose Rentals
• Long-Term Residential Rentals
• Short-Term Rentals

1. Renting for Commercial Purposes in Turkey

If you rent out your property for accommodation, you must pay taxes on the generated income. If rented out for business purposes, the tenant must pay Stoppage Tax (Stopaj Vergisi).

Landlords must pay annual taxes for the previous calendar year at the nearest tax office, in two equal installments: the first between March 1-25 and the second in July.

2. Long-Term Renting in Turkey

Long-term rentals in Turkey are straightforward and defined as a minimum of one month with a legal contract. Tenants often request small repairs and a fresh coat of paint before renting, and if you agree, they must return the property in the same condition.

White goods and lighting fixtures are generally not included in rentals. Larger maintenance costs are usually deducted from the rent, while the tenant pays the monthly building or site fees (Aidat). Communication is key, and expectations should be discussed during the contract period. Typically, one month’s rent is paid as a deposit.

If you use a real estate agent, the tenant pays a finder’s fee, usually one month’s rent or 12% of the annual cost. Annual rental increases are determined by the Consumer Price Index (TUFE) each year. When terminating a contract, two-months’ notice is standard. If you decide to sell the property, the tenant has six months to vacate under the new owner if the contract is notarized or until the end of the lease if registered under the title deed registry office.

3. Short-Term Renting in Turkey

Short-term rentals are more complex. The income generated is subject to commercial income tax. You need a tax account, an accountant, and solid financial records. Register yourself and the property with your local authority and obtain a trading license. You must also use the GIYKIMBIL system to register your guests with the police or gendarme. Income tax for the previous year is payable like annual rental income tax, with an additional 18% VAT on each rental.

For example, if a seasonal residence is rented weekly to different tenants, the tax duty cannot be fulfilled with a single tax return. Instead of yearly tax declarations, you follow a monthly system similar to hotel taxation.

You must open an account with the Ministry of Finance and submit regular declarations throughout the year. As the property owner, you are required to issue invoices and receipts and submit monthly, three-month, and annual returns. Many reputable real estate agents in Turkey offer management services.

Tax Rates and Incentives

There are tax incentives, such as discounted utility services and write-offs for repairs. For rental properties with a net income between 0-13000 TL, you will pay a Turkish income tax of 15%. It is 20% for incomes between 13,001-30,000 TL. You must retain all related documents and receipts for five years.

Tenants should make rental payments into your bank account or at the PTT (post office), labeled as “rental fee payment.” Payments under 500 TL can be made in cash.

Conclusion

Buying property in Turkey is a sound investment, and renting it out can provide lucrative returns. Whether you choose commercial, long-term, or short-term rentals, understanding the rules and procedures ensures a smooth and profitable experience.