The Ministry of Treasury and Finance Revenue Administration  has issued a General Communique on the Implementation of the Valuable House Tax ("Communique") in the Official Gazette dated 15 January 2021 and numbered 31365. You can read the full Communique  here. (Available in Turkish only)

The Communique has been introduced to implement articles 42 to 49 of Real Estate Tax Law No. 1319 which was amended through Law No. 7194 published in the Official Gazette dated 7 December 2020.

What does the Communique Say?

The Communique regulates principles and procedures regarding the subject of the tax, the concept of tax value and residential immovable property, the taxpayer and where their liability begins and ends, exemptions, and the tax base.

In this context, the Communique specifies the term residential immovable property as buildings with residential qualities, and each independent section within a building consisting of more than one independent section. In terms of taxation, each independent section is assessed separately.

The Communique also clarifies that while assessing whether an immovable property has the characteristics of a "residence", the actual status of the immovable property will be taken into consideration, as well as its registration in official records. The tax value of the building will be provided by the municipality where the immovable property is located.

Who Pays the Tax?

The Communique stipulates the taxpayer responsible for the Valuable House Tax in compliance with Law No. 1319 as follows:

  • the owner of the immovable residential property,
  • the holder of any usufruct rights, or,
  • if neither exist, those who possess the property as if they were the owner.

Who is Exempt from the Tax?

On the other hand, general and special budget administrations, municipalities, universities, the Housing Development Administration of Turkey, and those with bare ownership of immovable property are exempt from the tax.

What is the Payment Procedure?

Once the value of a house is assessed to have exceeded the Valuable Housing Tariff ("Tariff") Valuable House Tax will be due in the following year. Valuable House Tax declarations must be submitted by February 20th of the following year and must be paid in February and August in equal installments.

What is the Applicable Tariff in 2021?

Contrary to the examples set out in the Communique that value the Tariff at TRY 5,250,000, as per the General Communique on Personal Income Tax Law published by the Ministry of Treasury and Finance Revenue Administration on 29 December 2020 in the Official Gazette, the revaluation rate increase for 2020 is 9.11%. Therefore, in accordance with Article 44 of Law No. 1319, the rate in 2021 will be imposed as 4.55 % for Valuable House Tax. Thus, the Tariff will be TRY 5,227,500.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.