I bought a property in Turkey and want to sell it within a short period. What taxation issues should I expect?

This article is prepared for individual investors who invest in Turkey for investment purposes and does not apply to companies.

Real estate bought and sold in Turkey generates taxable income. This tax is called the capital gains tax.

What Is Capital Gains Tax?

If an individual taxpayer in Turkey sells a property within less than 5 years of purchase, they must pay tax on the profit earned. This is called capital gains tax. For example, if a property is purchased for 2,500,000 TL in June 2024 and sold to another party for 4,000,000 TL in December 2025, capital gains tax must be paid on the difference of 1,500,000 TL.

Are There Any Exemptions?

Yes. There are two main exemptions:

Exemption Due to 5-Year Holding Period

If an individual taxpayer holds a purchased property for at least 5 years, the profit is not subject to taxation, regardless of the selling price or profit amount.

Exemption Due to Gratuitous Acquisition

If the property was acquired through gratuitous transfer, no capital gains tax will be collected on the income obtained from selling this property. The most common gratuitous transfer methods are properties acquired through donation or inheritance. These properties are not subject to taxation, regardless of how long after the acquisition date they are sold.

What Are the Recent Developments in Capital Gains Tax?

As of 2025, the Ministry of Finance has implemented new applications to determine real market values in property sales. The Electronic Advertisement Verification System (EIDS) was put into operation in 2024 to enable advertising on widespread internet listing sites across Turkey (such as Sahibinden and Hepsiemlak).

This system only allows property owners and real estate businesses with authorization certificates to post advertisements on widespread internet listing sites across Turkey.

Although this system operates under the Ministry of Trade, it is integrated with the Ministry of Finance’s infrastructure. Therefore, the sales values of advertisements given electronically are also known by the Ministry of Finance.

In property sales, showing the deed sale value significantly lower than the prices shown in internet advertisements to reduce title deed fees and tax items (income tax, capital gains tax) attracts the attention of the tax office inspection.

What Are the Ways to Reduce Capital Gains Tax on Property Sales?

Let’s explain this issue with an example: “I bought a property for 2,000,000 TL in February 2023. By February 2025, due to increasing inflation, the apartment’s selling price became 7,000,000 TL. However, due to the increase in market values, purchasing a similar apartment in the market would also cost 7,000,000 TL. In this situation, there is no real profit. The property value has only increased at the inflation rate. How should this be explained?”

If a property purchased for 2,000,000 TL is sold to another person for 7,000,000 TL before five years pass, there will be a capital gain of 5,000,000 TL. However, since the market comparables and the property’s construction costs have also increased, the 5,000,000 TL value increase does not actually represent any real profit.

To eliminate this situation (to avoid paying capital gains tax on 5 million TL), an inflation adjustment must be made. Thus, there is an opportunity to update the property’s value at the inflation rate (Domestic Producer Price Index).

Updating the property’s value at the PPI (Producer Price Index) rate is called inflation adjustment. When inflation adjustment is made, the property value is updated by paying tax only on 5% of the value increase. Thus, even if a value increase of 5,000,000 TL is obtained on the property (250,000 TL on 5,000,000 TL by paying only 5% tax), since the property sale price is increased at the inflation rate, the income obtained will not be subject to capital gains tax.

Is Inflation Adjustment Mandatory for Properties?

Making an inflation adjustment is entirely left to the property owner’s preference. The property owner can choose to make an inflation adjustment only for the property they will sell or for their other properties.

How Is Inflation Adjustment Made for Properties?

Inflation adjustment is made with a declaration submitted to the tax office.

Is There a Special Condition to Benefit from Inflation Adjustment?

Yes. To benefit from the inflation adjustment advantage, the five per cent tax arising from the update must be paid by the evening of the 25th day of the month following the revaluation date. Otherwise, the property owner cannot benefit from this advantage.

Author: Av. Selimhan Cinas ( Lawyer)

Source: https://www.cinashukuk.com/post/ta%C5%9F%C4%B1nmaz-sat%C4%B1%C5%9Flar%C4%B1nda-vergilendirme-sorunu