Investing, as we all know, is a tool for wealth creation. However, contrary to popular belief, investing is not something that only the rich can do. Anyone who uses their mind can make an investment in accordance with their own budget if they wish. In response to the question of how to proceed in the investment process in Turkey, it would be a good move to start with the sale of property. There is not any difference or exception in selling property to foreigners or selling properties to Turkish citizens in our country.
Revenue Tax in Real Estate Sale
Income tax is another important factor in answering the question of how to proceed in the investment process. If the property has been owned for less than 5 years, the increase in value during the sale of the property is subject to revenue tax. Capital gains obtained from the sale or ownership of immovable acquired, donated or transferred free of charge, after 5 years, are not subject to tax even if they are acquired in return for a price.
Taxation of Capital Gains from the Sale of Real Estate
Real persons, who receive residual value rom the real estate appraised after the sale of the real estate subject to appraisal, declare their income annually in their income tax return. The definition of taxable income is determined by the selling price less the cost of acquiring the property and any selling-related expenses remaining under the seller's responsibility, plus any taxes and duties paid. If the increase in the producer price index between purchase and sale is 10% or more, the acquisition costs increase at the specified rate of increase.
Title Deed Fee Payable after the Sale of the Property
Just like when purchasing real estate in Turkey, a 2% commission is charged for real estate sales. The certificate of title calculated over the sale price is invoiced separately to the buyer and seller of the property. Before applying to the land registry office, you must pay a certificate of title fee to the tax office before making an agreement with the land registry office.
VAT in Real Estate Sale
If the real estate buyer is constantly buying and selling real estate during the sale phase, VAT will be charged on the selling price, as this is an economic advantage. In the statement we made in response to the question of how to proceed in the investment process, VAT appears as another important issue that needs to be mentioned. Individuals who acquire real estate for their own use and do not earn commercial income from regular trade are not subject to VAT. In Turkey, if the Ministry of Finance and Expenditure determines that more than one sale is made on a calendar year or that sales are made in the following years, natural persons are classified as merchants and VAT is collected from them.