What Property Owners Need to Know About Real Estate Rental Income Tax
Are you a property owner in Türkiye earning rental income? Understanding the latest tax regulations is crucial to maximizing your profits and staying compliant with Turkish tax laws. In this guide, we’ll break down the 2024 real estate rental income tax rules, including exemptions, deductions, and filing deadlines, to help you navigate the process with ease.
At Select Turkey, we’re committed to providing you with the latest insights and expert advice on real estate in Türkiye. Whether you’re a seasoned investor or a first-time landlord, this guide will help you make informed decisions about your rental properties.
Key Highlights of the 2024 Rental Income Tax Rules
1. Tax Exemption for Residential Rental Income
In 2024, Türkiye offers a generous tax exemption for residential rental income. Here’s what you need to know:
- Exemption Limit: A 33,000 TL exemption applies to residential rental income.
- Eligibility: This exemption is available only to individuals earning rental income exclusively from residential properties.
- Single Residence Rule: If you own multiple rental properties, the exemption is applied once to the total rental income.
- Co-Ownership: If a property is co-owned, each owner can claim the exemption for their share of the rental income.
Important Note: Taxpayers engaged in commercial, agricultural, or professional activities are not eligible for this exemption, even if they earn residential rental income.
2. Expense Deduction Methods
Property owners can choose between two methods to deduct expenses from their rental income:
A. Lump-Sum Expense Method (Götürü Gider Yöntemi)
- Deduction Rate: 15% of the rental income (after applying the 33,000 TL exemption).
- Commitment: Once selected, this method cannot be changed for two years.
B. Actual Expense Method (Gerçek Gider Yöntemi)
- Rental Expenses: If you rent out a property while renting another for personal use, you can deduct your own rental expenses from your taxable income.
- Mortgage Interest: Only the interest portion of mortgage payments for rental properties is deductible.
- Depreciation: A 5% depreciation deduction applies for five years from the property’s acquisition date.
- Documentation: Taxpayers must keep supporting documents for expenses for five years and provide them upon request.
3. Declaration and Filing Deadlines
- Taxable Period: Rental income earned between January 1, 2024, and December 31, 2024, must be declared.
- Filing Deadline: March 1 to March 31, 2025.
- Penalties: Failure to declare or underreport rental income will result in the loss of the 33,000 TL exemption.
4. High-Income Taxpayers & Exemption Limit
If your total gross income from wages, investments, real estate, or other sources exceeds 870,000 TL in addition to rental income exceeding 33,000 TL, you cannot benefit from the 33,000 TL exemption.
Why Rental Income Tax Matters for Property Owners in Türkiye
Türkiye’s real estate market continues to attract investors worldwide, thanks to its competitive prices, high rental yields, and favorable tax policies. By understanding the 2024 rental income tax rules, you can:
- Maximize your tax savings through exemptions and deductions.
- Avoid penalties by filing accurate and timely tax returns.
- Make informed decisions about your real estate investments.
Tips for Property Owners
- Consult a Professional: Tax laws can be complex. Work with a professional accountant or consult the Turkish Revenue Administration for personalized advice.
- Keep Accurate Records: Maintain detailed records of your rental income and expenses to simplify tax filing.
- Plan Ahead: Mark your calendar for the March 2025 filing deadline to avoid last-minute stress.
Final Thoughts
Navigating Türkiye’s rental income tax regulations doesn’t have to be overwhelming. With the right knowledge and preparation, you can optimize your rental income and stay compliant with the law.
At Select Turkey, we’re here to support you every step of the way. Whether you’re looking to invest in Türkiye’s booming real estate market or manage your existing properties, our team of experts is ready to help.
