TURKISH PROPERTY RENTAL INCOME EXPLAINED
If you choose to rent out your property in Turkey, the rental income earned is taxable. In 2018, new legislation was released stipulating that those wishing to rent out their property should be in possession of a business licence, ‘Vergi Levhasi’, to trade their rental income through.
The tax incurred from a holiday rental property is deducted from the net figure achieved after personal tax allowance and property overheads are subtracted. This figure is subject to tax at increasing percentage bands. You may also deduct legitimate property-related expenses such as management fees, repairs, insurance and other costs of this sort.
If you avoid paying tax on your property rental earnings, you are likely to be penalised and face a sizable fine from tax authorities, calculated from the assumed rental income earned over a particular period, but is not disclosed, and does not allow for personal tax allowances or overheads. This penalty would also be subject to interest.
Despite there being a double tax treaty between the UK and Turkey, which means that property owners will not be taxed twice to prevent double taxation, rental property owners are required to provide the authorities with evidence that rental tax has been paid. This will also need to be declared in a personal UK tax self assessment form.
In 2019, over 750 villa owners in Kalkan were penalised substantially for under-declaring their rental income.
THERE MUST BE A BETTER WAY? THERE IS AND WE CAN HELP…
Owning a property abroad is both an investment and a lifestyle choice for many, and so it should be! We understand how difficult it can be to manage your finances, which is why we provide our clients with an end to end service offering, taking the pressure off their shoulders and allowing them to enjoy the fruits of their investment, minus the labour and hassle.
The regulations in Turkey are ever changing and can sometimes be difficult to keep up with! At Kalkan Holiday Property, our specialists can help to streamline the tax management process, so you can focus on your holiday without having to worry about the running of your property rental business or spending hours going through accounts.
For more information on this service, please get in touch by completing the contact form below for a no obligation consultation.