Investors who earn income through the rental application are obliged to pay taxes together with the declaration. In accordance with article 73 of the Revenue Law, the precedent rental value is the minimum amount that has been converted into a mandatory declaration in terms of leased properties. It should be known that citizens who reside in the Republic of Turkey and will receive rent are subject to precedent rental applications. An application that will be effective until March 31 is expected to cover all taxpayers.
When is the Precedent Rental Value Declared?
This value, showing the rental income of the previous year, is declared within the first 3 months of each year. It would be useful to give an example that property owners have to declare the precedent rental value of 2021 within the first 3 months of 2022.
How is Precedent Rental Value Calculated?
The fact that the precedent rental price is lower than the rental price may cause various problems. The Ministry of Finance may initiate an investigation regarding the property owner if the rental is shown to be less than the comparable value. In order to prepare the precedent rental value in accordance with the instructions, it will be useful to pay attention to the following criteria. If the real estate tax is calculated over 500 thousand liras, it is obliged to report a precedent value of at least 25 thousand TL.
The Precedent Rental Value, is still equivalent to 5% of the property tax value rate of the leased property. For example, it should be known that the precedent rental value of a real estate with a real estate tax value of 900 thousand liras was calculated as 45 thousand liras.
When is Precedent Rental Value Applied?
There are cases where there is not any need to apply a precedent rental. In case of documenting these conditions, which are mentioned below, this fee will not be required. In the rental procedures carried out by the residences included in the general budget, annexed budget administrations, special provincial administrations, municipalities and other public institutions and organizations, the equivalent rental price is not calculated. In case the buildings are allocated for the residence of the owners, i.e. parents, children, grandchildren and siblings, tax do not apply.