In terms of taxation, the determination of income from immovable capital is extremely important. It is also important whether the person is a natural person or a legal person in determining the said income of real persons who rent the real estate they own and earn rental income and this difference is taken into consideration.
In the process of determining the income from the immovable capital of a real person, that is, a person who is not an institution or organization, it is also important whether the person is subject to the real method or the simple method. If the taxpayer in question is taxed with the real method, the gross income from the leased property is calculated. The net income from the immovable capital is determined after deducting the actual expenses made in accordance with Article 74 of the Revenue Law and actual expenses that require proof with documents.
How Is Income from Immovable Capital Calculated?
While determining the income from the immovable capital, the fee collected in cash or in kind within the calendar year or for the previous year is accepted for the rental of taxable goods and rights as stated in the article of the said law. In the event that the tenant makes repairs to the property in a way that will expand the property or increase its economic value continuously is transferred to the landlord free of charge, the difference in the transfer of the property lower than the previous value is considered as a free transfer and the rent is collected for the landlord on this date.
The net income from immovable capital is determined after deducting the expenses incurred by the owner in the rental of the said real estate or in the process and specified in the law. It is also wondered which expenses can be deducted from the income when calculating the net profit by deducting the actual expenses specified in Article 74 of the Revenue Law.
Which Expenses Are Deducted When Calculating Real Estate Income?
It is fixed by law to deduct some item expenses from net income while calculating the income from immovable capital. The real estate expenses in question are as follows:
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Lighting, heating, water, elevator expenses paid by the landlord
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Administrative costs that are comparative with the importance of the property and the management of the leased property
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Insurance costs of leased property and rights
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Interest on debt incurred and spent on specific property and rights
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5% of the acquisition price of the property rented as a residence for 5 years is also subject to discount
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In addition, real estate tax, customs, duties and unearned incrementas well as the participation fee paid to the municipalities by the property owner, are among the expenses to be deducted in the calculation of net income
Apart from all these, items that will affect the net income of real estate such as depreciation expenses, maintenance and repair expenses, rental expenses are also deducted from the net income.