V
Voodoobazza
Guest
Anyone come across the tax treatment of property investment in Turkey, CGT, Proprty Tax, Exit tax etc ..??
E
endowed
Guest
Diarmaid Condon, mentioned previously in this had a recent [broken link removed] in the Sunday Business Post which might be of interest.
Have you considered putting up a link to calculate or advise the investor of their liability in his/her own country. I realise that you are not just dealing with Irish residents but a link to the following site might be helpful See [broken link removed]. I sure UK Revenue have something similar
G
GtaSa
Guest
Aegean, link for the blog is not working.
For anyone interested below is a simple rounded calculation for the tax to be paid in Turkey on rental income.
Gross income-------> 10000YTL
Excempt ------------> 2200YTL*
--------
Gross after excempt > 7800YTL
Expenses at 25% ---> 1950YTL **
--------
Total Taxable--------->5850YTL
Tax payable at 20%----1170YTL ***
Tax is payable in two installments in March and July. There is only one form filled yearly.
*For 2005 excempt was 2000YTL. For 2006 excempt is 2200YTL - 1300€.
**You can claim fixed %25 expenses without proof or collect receipts and claim. For simplicity it is easier to claim %25.
*** Tax bands (2005):
-Up to 6600 YTL %20
-For the first 6600 YTL of 15000YTL 1320YTL, the remaining at %25
-For the first 15000YTL of 30000YTL 3420YTL, the remaining at %30
-For the first 30000YTL of 78000YTL 7920YTL, the remaining at %35
-If the income is more than 78000YTL, 24720YTL for the first 78000YTL
and remaining taxed at %40.
I believe Istanbul will be high on the agenda for investments in the coming months. Turkish Airlines started direct flights from Dublin to Istanbul twice weekly on Tuesdays and Fridays.
For anyone interested below is a simple rounded calculation for the tax to be paid in Turkey on rental income.
Gross income-------> 10000YTL
Excempt ------------> 2200YTL*
--------
Gross after excempt > 7800YTL
Expenses at 25% ---> 1950YTL **
--------
Total Taxable--------->5850YTL
Tax payable at 20%----1170YTL ***
Tax is payable in two installments in March and July. There is only one form filled yearly.
*For 2005 excempt was 2000YTL. For 2006 excempt is 2200YTL - 1300€.
**You can claim fixed %25 expenses without proof or collect receipts and claim. For simplicity it is easier to claim %25.
*** Tax bands (2005):
-Up to 6600 YTL %20
-For the first 6600 YTL of 15000YTL 1320YTL, the remaining at %25
-For the first 15000YTL of 30000YTL 3420YTL, the remaining at %30
-For the first 30000YTL of 78000YTL 7920YTL, the remaining at %35
-If the income is more than 78000YTL, 24720YTL for the first 78000YTL
and remaining taxed at %40.
I believe Istanbul will be high on the agenda for investments in the coming months. Turkish Airlines started direct flights from Dublin to Istanbul twice weekly on Tuesdays and Fridays.
Don't forget that you also have to pay tax on rental profit in Ireland. You can't offset the tax paid in turkey against your tax due in Ireland. The same currently applies when you sell the property. You will be taxed on the gain as though the property was an Irish property. Don't know if there is a tax on any gain when you sell a property in Turkey.
You have to do a seperate computation in respect of the tax return in Ireland as though the property was an Irish Property.
You have to have all receipts.
See [broken link removed] for allowable deductions
Other things to be aware on when investing in Turkey are
Currency Fluctuations and Inhetitance issues
I'm sure there are more
You have to do a seperate computation in respect of the tax return in Ireland as though the property was an Irish Property.
You have to have all receipts.
See [broken link removed] for allowable deductions
Other things to be aware on when investing in Turkey are
Currency Fluctuations and Inhetitance issues
I'm sure there are more
GtaSa, thanks for the tip on the broken link - now fixed. You seem to be in the know regarding rental taxes in Turkey. Can I ask, are you yourself paying these taxes? Perhaps you could PM me about using your info on my blog?
Asdfg, you can usually buy a property in Euros in Turkey so currency promlems can be eliminated if you get the developer/agent to fix the price in Euros (watching for unreasonable price hikes of course). Inheritance tax information can be found in section 7.3.3
Asdfg, you can usually buy a property in Euros in Turkey so currency promlems can be eliminated if you get the developer/agent to fix the price in Euros (watching for unreasonable price hikes of course). Inheritance tax information can be found in section 7.3.3
G
GtaSa
Guest
Aegean, you can use the info on your blog. Tax exceptions can change yearly. There are very good sites explaining these in Turkish but I have not seen any sites in English other than basic info.
Turkish currency have been very strong against Euro and Dollar lately due to growth in economy. It is more linked to performance of Dollar than Euro. Anyone who bought last 2-3 years have been gaining on currency front as Euro been loosing it's value.
There are a lot of small arguments such as being a muslim country, earthquakes etc etc which many of those unlikely to be relative to areas people are buying. There are areas in south where majority of population is Germans with their own churches, schools, shops etc. Most of these areas have minor earthquakes similiar to earthquakes in Greece. Also all buildings up to 5 year old are build to stand earthquakes. Government is very strict on these regulations.
I think the real opportunity is with Istanbul if the cards played right. Similiar to Warsaw, Prague etc. There are a lot of high quality developments but not have been hitting to the Irish market yet. Also it is far less risky than holiday homes. Property market will heat up when the mortgage system takes its place. This is currently being planned and there is a good chance it will be finalized this year.
Turkish currency have been very strong against Euro and Dollar lately due to growth in economy. It is more linked to performance of Dollar than Euro. Anyone who bought last 2-3 years have been gaining on currency front as Euro been loosing it's value.
There are a lot of small arguments such as being a muslim country, earthquakes etc etc which many of those unlikely to be relative to areas people are buying. There are areas in south where majority of population is Germans with their own churches, schools, shops etc. Most of these areas have minor earthquakes similiar to earthquakes in Greece. Also all buildings up to 5 year old are build to stand earthquakes. Government is very strict on these regulations.
I think the real opportunity is with Istanbul if the cards played right. Similiar to Warsaw, Prague etc. There are a lot of high quality developments but not have been hitting to the Irish market yet. Also it is far less risky than holiday homes. Property market will heat up when the mortgage system takes its place. This is currently being planned and there is a good chance it will be finalized this year.
Yes, I looked at the possibility keeping any rental income in Turkey, in Lira, rather than repatriating the funds but I'd be hit for worldwide income anyway. I realise this only applies in the UK but I was advised to set up an offshore 'exempted property fund' due to family circumstances but the admin & set up charges were ridiculous and the rent from either a long let to a Turkish national, or holiday lets didn't justify the expense.asdfg said:
You are also probably right about currency fluctuations - many analysts think that the Lira is overvalued at present and a significant 're-alignment' is on the cards
I suppose what I'm saying is that rental is not yet an attractive proposition in Turkey but capital appreciation is what I went in for anyway.
GtaSA,
I'm not holding my breath on Turkish mortgages because the interest charges will be very unattractive to Euro based products and even Sterling ones. However, the new system is highly regarded and appears to be a very safe one for motgagees with the dreaded repossession almost impossible. I imagine this is to allay the fears of the domestic market, who are largely new to the whole concept.
Thanks for permission to use your info.
Matt
I'm not holding my breath on Turkish mortgages because the interest charges will be very unattractive to Euro based products and even Sterling ones. However, the new system is highly regarded and appears to be a very safe one for motgagees with the dreaded repossession almost impossible. I imagine this is to allay the fears of the domestic market, who are largely new to the whole concept.
Thanks for permission to use your info.
Matt
G
GtaSa
Guest
Yep, mortgage system is more appealing to the locals rather than foreigners. The interest rates are still high over there with about 12% APR even if you are buying a home. With the new mortgage laws this will go down probably a bit more and will increase the demand on property further more. It might sound funny but Turks think even the 10-12 APR is very good for now. And it is good considering few years ago interest rates were 40-50 % This is why I beleive investing in Istanbul or one of the other major cities is a better where you have a more chance of selling to locals unlike holiday resorts.
This is why I beleive investing in Istanbul or one of the other major cities is a better where you have a more chance of selling to locals unlike holiday resorts.Irish residents are also liable to tax on world wide income
If you buy when the Turkish Lira is strong against the Euro and a re alignment happens then a significant part if not all of your capital appreciation may be taken up by the amount of the re-alignment