How to Calculate Property Tax in Turkey
Hello everyone from beautiful Alanya!
As your real estate and investment expert. In this post I’ll guide foreign investors through property resale in Alanya (and similar Turkish cities) with a focus on capital gains tax – often called the property tax on profit. I’ll explain step-by-step how to compute your taxable gain when you sell a secondhand property, and give a concrete example using real figures. We’ll also cover key tips for foreigners, including current exemptions and rules for 2026.
Understanding Capital Gains (Property Resale) Tax in Turkey
Turkey does not impose special higher taxes on foreigners – all buyers pay the same rates as Turkish citizens. The main “property tax” when you resell (within five years) is the capital gains tax (Değer Artış Kazancı). The big rule is the 5-year holding exemption: if you own the property for more than 5 years before selling, the profit is fully tax-exempt. This is designed to encourage long-term ownership. If you sell within five years of purchase, the net profit (after accounting for inflation and costs) is subject to progressive income tax rates (up to about 40%).
Importantly, we calculate tax on the inflation-adjusted profit, not just the raw nominal gain. In practice, Turkish tax law requires adjusting the purchase price by inflation using the Domestic Producer Price Index (D-PPI, known in Turkish as “Yurt İçi ÜFE” or Yİ-ÜFE). This “indexation” step removes the effect of inflation and shows the real gain. Only the difference between the sale price and this inflation-adjusted purchase price – minus any documented selling costs – is taxed.
In summary: profit is (selling price – indexed purchase price – costs), and that is taxed if the holding period is under 5 years. (After 5 years, it’s exempt.) We illustrate this with an example below.
Step-by-Step Example Calculation
(an example of property resale). Imagine you bought this house in late 2022 and sold it at the end of 2025. To calculate the Turkish capital gains tax on your sale, follow these steps:
Index the Purchase Price for Inflation. Look up Turkey’s domestic PPI (Yİ-ÜFE) for the month before purchase and the month before sale. Multiply your original purchase cost by the ratio of these indices. In our example: the D-PPI in Dec 2022 was 2,021 and in Dec 2025 it was 4,783. So the inflation factor is 4,783/2,021 ≈ 2.366. Thus the indexed purchase price = 1,000,000 TL × 2.366 ≈ 2,366,650 TL.
Compute the Nominal Profit. Subtract the indexed purchase price from the selling price. Here the selling price is 3,000,000 TL, so nominal “reel profit” = 3,000,000 – 2,366,650 = 633,350 TL.
Subtract Selling Expenses (Deductible Costs). From that profit, deduct any documented costs of the sale. This includes your Tapu title-deed transfer fees (Tapu harcı), real estate agent commissions, notary or legal fees, and receipts for improvements or renovations that add value. In the example, Tapu and other costs total 150,000 TL. So net gain before exemption = 633,350 – 150,000 = 483,350 TL.
Apply the Exemption Threshold (if any). For 2025 sales, Turkey allows a 120,000 TL exemption on capital gains. Subtract this from the net gain: 483,350 – 120,000 = 363,350 TL. (If your net gain were below 120,000 TL, no tax would be due.)
Result: Taxable Gain. The remaining 363,350 TL is the taxable amount. You would declare this in your income tax return (filed in March of the following year) and pay income tax on it according to Turkey’s progressive rates. For our example, the final tax liability depends on your overall income bracket. But the important point is that the taxable capital gain is 363,350 TL after all adjustments.
Thus, by indexing for inflation and deducting legitimate costs, the taxable gain is much smaller than the raw sale-minus-purchase difference. In this example, instead of paying tax on the full 2,000,000 TL increase, you pay on 363,350 TL. This method – using the D-PPI and documented expenses – is exactly how Turkish law requires capital gains to be computed.
Key Tax Tips for Foreign Resellers
Plan Around the 5-Year Rule: Aim to hold the property at least 5 years. After 5 years, the sale is fully exempt from capital gains tax. If you must sell sooner, be prepared to pay tax on the net gain.
Keep Detailed Records: Save all purchase and sale documents, renovation receipts, Tapu transfer tax receipts, and agency fees. You can deduct these expenses to reduce your taxable gain. For example, renovations that increase the property’s value can be added to your adjusted cost. In one foreigner’s guide, they recommend “keep all receipts and valuation reports for future resale or tax exemptions”.
Use Inflation Indexing: Always adjust the purchase price by the D-PPI. This can more than double your effective cost base in times of high inflation, slashing the taxable gain. In our example, the 1,000,000 TL purchase became 2,366,650 TL after indexing.
File on Time: If you sell within 5 years, you must file a capital gains tax return in the March following the sale (e.g. sales in 2025 are declared by Mar 2026). A Turkish accountant can help you submit this. Note: if your net gain is under the exemption threshold (120,000 TL for 2025), you do not even need to file.
Foreigners Pay Same Taxes: Non-residents are taxed only on Turkish-source gains, but the rules and rates are identical to residents. There’s no extra surcharge on foreigners. A popular FAQ confirms: “All taxes—purchase, annual, or sale-related—are the same for foreigners and Turkish citizens.”
Don’t Overlook Other Taxes: Remember the one-time transfer tax (Tapu harcı) on purchase (officially 4% of the declared value). Also, you pay an annual property ownership tax (emlak vergisi) of about 0.1–0.6% of the assessed value (typically 0.2% for houses). These do not reduce your capital gain, but they are important costs to budget.
Consult Local Experts: Tax rules can be complex and subject to change. Getting advice from a Turkish tax advisor or accountant (mali müşavir) can ensure you use all possible deductions and meet filing requirements.
Exemptions and 2026 Updates
Currently (as of early 2026), the exemption for property capital gains remains 120,000 TL for 2025 sales. For 2026 sales to be declared in March 2027, the government may set a new threshold; foreign investors should watch for any official updates late in 2026. The 5-year holding exemption is unchanged – holding longer than 60 months shields the gain completely.
A special case: inherited or gifted property. If you acquired the property without payment (inheritance or gift), there is no capital gains tax at all on the future sale, and the 5-year rule does not apply. In other words, inherited real estate can be sold later with no income tax on the gain.
FAQ
Q: What if I sell my home after 5 years?
A: If the sale occurs beyond 5 years from the title-deed date, Turkish law exempts the gain entirely. No capital gains tax is due.Q: Which index values do I use for D-PPI indexing?
A: Use the D-PPI (Yİ-ÜFE) for the month before your purchase and the month before your sale. Multiply your purchase cost by (D-PPI_sale / D-PPI_purchase).Q: What expenses can I deduct from my gain?
A: Only documented expenses. This includes Tapu (title deed) fees paid at purchase or sale, realtor commissions, notary and translator fees, and costs of improvements (with invoices). You cannot deduct typical personal living expenses.Q: Do I need to file a Turkish tax return when I sell?
A: Yes, if the sale is within 5 years and your net gain exceeds the exemption (120,000 TL for 2025 sales). The return is filed between March 1–31 of the year after the sale. If your adjusted gain is below the threshold, you don’t owe tax and generally don’t need to file.Q: Are there any new changes for 2026 I should know?
A: As of now, the rules are the same as 2025. Any adjustments (like a new exemption amount) will be announced by the Revenue Administration. Stay updated, but the core concepts (indexing by D-PPI, 5-year rule, deductions) remain consistent.
Navigating real estate tax in Turkey may seem daunting, but with the right information and professional help, foreign investors can plan their resale strategy effectively. By using the inflation index and keeping records, you can minimize your taxable gain when the time comes. I hope this guide has clarified how to calculate capital gains tax in Turkey on a resale property. If you have more questions, feel free to reach out and for more details you can check out my YouTube Video
