House Taxes - Turkey - EX-Pats and Owners Abroad, Holiday Forums

House Taxes - Turkey

Olya

2005-06-25 22:10:34

Hi all
We have a neighbour who has just purchased a place in Kusadasi. They have bought a "Shell" and want to have it finished, and then see if they can re-sell it. I have asked them if they know if they will pay Turkish Taxes if they do this. I am just wondering if it is similar to the UK and they will pay Surtax on their profit?

Thanks
Geoff and Olya

bryn

2005-06-26 09:44:42

First off if they have bought a shell as you say, why had the building work stopped at that stage?? I hope they checked it out thouroughly before purchase as it could have been stopped as it exceeded planning consent - I sincerely hope not for their sakes. Apart from the sales tax 3% when they bought when they go to sell it they will have to pay capital gains tax if they sell before they have owned it for four years. So best advice is keep a record of expenditure and I hope they havent hidden any of the buying price to avoid front end tax because if they sell it and cant do that on the sale then the recorded buying price will be used and they will have to pay more capital gains on it. This sort of thing happened a lot in Spain and now people are getting caught out.

Olya

2005-06-29 17:05:53

Thanks Bryn
How much is the capital gains tax?

Olya

bryn

2005-06-29 17:45:39

Not certain but I have a feeling its about 30% I will check and try to get back to you.

mibut

2005-06-29 21:58:56

http://www.holidaytruths.co.uk/viewtopic.php?t=16091&start=20

Couch Potato

2005-06-30 10:40:20

tax in property in turkey

On the subject of selling a property,if I were to sell my property within the first four years,and use all the proceeds to buy another house,would I still be liable to pay tax on the profit from the sale of the first house.
C.P.

mibut

2005-06-30 10:57:58

yes

Olya

2005-07-02 11:44:21

Hi Mibut

Thanks for this:
http://www.holidaytruths.co.uk/viewtopic.php?t=16091&start=20

"Just had answer back from Turkish lawyer regards capital gains tax.
Capital gains is due if you sell within 4 years of purchase.
The first TL 12 milyar profit is tax free. So if you buy a property with a declared value of TL 25 milyar and then sell it with a new declared value of TL 40 milyar, your profit will be TL 15 milyar and tax will be due on TL 3 milyar.
The rate for private individuals is 25%"

But, for me, being not totally sure about this, what is TL25 milyar??
25,000,000 ??????

Thanks
Geoff and Olya

chelsea boy

2005-07-02 12:56:31

25,000 ytl or 25,000,000,000 tl or about £10,500. or 15500 euros now you can see why they wanted to ditch the 6 zeros.

bryn

2005-07-02 13:12:16

its a bit sad that your lawyer is still qouting the old system with the extra six zeros. most people here are talking YTL only the dinosaurs are still working old system

mibut

2005-07-02 13:18:02

If you check the date on the original post you will see that the old currency was still in use then. !!!!!!!!!!!!

bryn

2005-07-02 14:21:54

it still is in use now but most of the modern people here are only using YTL

mibut

2005-07-02 15:08:29

Bryn
I know it is not in use now.
The original post was made in 2004 when it was in use

Olya

2005-07-03 12:37:08

Hi guys

I dont want to get into an augument about why and when they removed the 6 zero's, I am just pleased that they did!!!

But for me being a "Thickie"
If I have got this right then.....
House (Shell) cost 40,000 YTL
To bring it upto "spec" 35,000 YTL
Total 75,000 YTL .....
Assuming that they sell it for example... 137,500 YTL this makes a profit of 62,500 YTL
The first 12,000YTL is free of tax and so they pay 25% tax on 50,500YTL which is, according to my not very good maths 12,625 YTL.

Would this be about right guys??
Thanks

bryn

2005-07-03 12:45:20

yep that looks about right

Olya

2005-07-03 14:10:27

Thanks

Clearer to me now.

I will explain this to my friend.

It also gives me an idea for ours in a few years time

gummus

2005-07-23 22:32:12

I found some interesting info on a Q&A on a website (http://www.tropicalbeachhomes.com/).

To quote :

"When I bought my property the solicitor recommended that I declare a different value for the property on the sales contract than what I actually paid. What's that about?

In Turkey the Tax Assessment Commission sets an assessed value for properties, on which tax calculations are based. This assessment generally seems remarkably conservative considering it is the valuation on which the Turkish government decides how much tax to levy!

You can choose to declare a higher value if you wish but it is perfectly legitimate to declare the value as assessed by the government instead and you will - legally - save yourself several hundred pounds in tax."

I wonder if this works for helping to keep your capital gains type tax down if you sell the property??

Olya

2005-07-24 09:43:06

Hi
Thanks for that. I seem to remember seeing something similar myself on one of the forum boards.

Geoff and Olya

bryn

2005-07-24 18:03:54

Gummus it wont help you keep your capital gains down as if the next buyer comes along and refuses to underdeclare then you are going to get whacked for the extra CGT, this has happened a lot in Spain and now the authoriies are getting wise to it there, there are also signs of them getting wise to it here so be careful. Thats said if you own the property for FOUR years then there is no CGT not what is quoted on the website you mentioned by the way.

gummus

2005-07-24 18:33:27

Thanks Bryn.....we are hoping to keep our property longer than the four year period, so this shouldn't affect us. However, from your experience, what % of people would not be willing to accept this lower figure on the paperwork when buying?

EX-Pats and Owners Abroad

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