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Turkish citizens, as well as investors and foreigners who own property in Türkiye and rent it out, may soon face a doubling of their annual tax bill under Ankara’s new fiscal reform.
The government’s 36-article tax package, submitted by ruling Justice and Development Party (AK Party) lawmakers to Parliament, abolishes the long-standing rental income exemption that has shielded small landlords from high taxation.
According to an impact analysis by the Treasury and Finance Ministry, landlords will now pay the equivalent of two months’ rent per year in taxes, instead of one.
For around two million homeowners and investors—both Turkish and foreign—the change marks one of the most significant shifts in the country’s real estate taxation in years, if implemented.
At the center of the change lies the removal of a long-standing ₺47,000 ($1,120) annual exemption on rental income. Once scrapped, all landlords—local or foreign—will be required to declare their full rental earnings starting in 2027.
The Treasury estimates that the measure will hit around 1.5 million homeowners, with total additional revenue reaching ₺22 billion ($520 million).
On average, each affected property owner will pay ₺15,000 ($360) more in tax annually, roughly equivalent to one month’s rent.
Currently, many homeowners pay taxes equal to about one month of rent per year. Under the new system, that burden will rise to two months.
Only retirees, widows, orphans, and people with disabilities will retain the exemption.
Finance Ministry data show that in 2024, about 2 million landlords declared rental income using the exemption. Roughly half a million of them were retirees or dependents who will continue to benefit. That leaves an estimated 1.5 million others—mostly working homeowners and investors—who will lose the privilege entirely.
For them, the increase translates into an additional ₺22 billion ($520 million) in taxes collected by 2027.
While the government frames the move as a step toward “tax justice,” critics argue it will further strain the middle class and small-scale investors, particularly those relying on rental income amid high inflation.
Local media have summed up the sentiment with a simple phrase: “10 rents for the landlord, two for the state.”
In practical terms, that means property owners will now hand over one-sixth of their annual rental earnings to the tax office.
The Finance Ministry insists the reform will bring greater fairness and fiscal balance. But for landlords—especially foreign investors already dealing with rising maintenance costs, insurance premiums, and fluctuating returns—the new rule is a reminder that Türkiye’s property market, while lucrative, is becoming a far more expensive place to hold assets.
For now, Türkiye’s real estate market remains attractive, with strong rental yields in major cities like Istanbul and Antalya.
But as taxes rise and compliance rules tighten, foreign investors are being forced to rethink their price for renting their property, just like the others in long-term calculus.
By 2027, the typical landlord—local or foreign—will effectively hand over two months of rent to the state each year.
The current rule, which benefits many directly and indirectly, might affect the numbers being paid every month if it's brought into force.
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