Urban rents and their taxation

One of the significant causes of corruption in our country, and particularly within municipalities, is urban rent. The formation of urban rents in Turkey is directly proportional to the activities of the construction sector in the country. Especially during periods of monetary expansion, investments in developing countries like Turkey tend to shift toward infrastructure and the construction sector. In recent times, urban rents have also been at the root of the phenomenon of corruption in our country. However, despite this being known, it is not being discussed.

Foreigners have also turned to real estate purchases in our country. Due to this demand, according to TUIK figures, 278,927 sales were made to foreigners between 2013 and 2021. In 2022 alone, 67,490 housing units were sold. In 2024, 23,781 housing units were sold to foreigners. The number of housing units sold to foreigners in the last 10 years is 357,000.

It is a fact that housing price increases have outpaced inflation, and therefore, urban rents have risen in real terms. Although housing policy appears to be determined solely by the government and bureaucracy, certain specialized structures are also influential in these policies.

Fragmented zoning authorities granted to numerous organizations facilitate the formation of zoning rents. Rent appears in two common forms: value created through zoning plans and value created through plan amendments. Under Article 18 of the Zoning Law, municipalities can collect a Regulation Partnership Share (DOP) from the value increase resulting from zoning plans. However, plan amendments that can generate very high rents are outside this scope.

One of the most important elements in terms of the formation and distribution of urban rent in Turkey is public real estate and the policies and practices regarding its management. The sale of Treasury properties, privatization, transfers, and the allocation of easement rights have been turned into tools for generating rent. In this process, forests, 2/B lands, agricultural areas, pastures, coasts, and protected areas have become tools for creating and distributing rent.

Different functions of the state are influential in the formation of urban rents through their duties at various levels. For example, while opening a region to zoning directly ensures the formation of rent, activities such as building a road or a dam in a region affect the value of the areas in that region. In this way, it causes the formation of rents.

The most important tool for reclaiming urban rents—which emerge as a result of infrastructure and industrial services carried out by central and local governments—for the public is the taxation of these rents. To prevent corruption and address urban rents, a "Rent Tax" should be implemented.