Landlords, this news concerns you: You may soon have to pay monthly instead of annually...
It has been claimed that the rental income tax, which landlords currently pay once a year, could be collected on a monthly basis. This would mean the tax is withheld at the source. The regulation aims to generate 40 billion liras in tax revenue.
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The rental income tax (Real Estate Capital Income-GMSİ), which landlords pay by filing a declaration once a year, could be transformed into an automatic tax.
ONE-FIFTH OF RENT TO BE DEDUCTED EVERY MONTH
According to a report by Erdoğan Süzer from Sözcü, under the tax package prepared by the government within this scope, tenants will be required to deposit their rent into the bank every month.
The bank will deduct 20 percent (1/5th) of the rent money deposited into the account as tax and send it to the Treasury, leaving the remainder in the landlord's account. With the new regulation, for example, a landlord who rents out their house for 10 thousand liras will see their monthly rental income drop to 8 thousand liras.
According to current law, the tax on rental income earned over one year is paid by filing a declaration the following year. During the declaration, the exemption amount, which increases annually by the revaluation rate, is deducted from the total income, and tax is levied on the remaining portion starting at 15 percent.
DEDUCTION AT SOURCE
In the new system to be introduced, rental income may be subject to deductions, similar to the tax withholding (stopaj) applied to employees' salaries each month. All rental payments will be made through banks. The bank may deduct a 20 percent withholding tax from the rent deposited into the landlord's account, just as it does with interest and similar earnings.
It was stated that the remaining amount could be deposited into the landlord's account as tax-paid rental income. With this method, the rental tax, which normally starts at 15 percent, will increase to 20 percent. Landlords will be able to declare their expenses later if they wish and request a refund of the tax they paid. It was stated that the practice will be valid for rental income obtained starting from 2025.
40 BILLION TAX TARGET
With the transition to a withholding tax application on rental income, it is calculated that the state will collect 40 billion liras in rental tax from landlords. This indicates that out of the expected 200 billion liras in rental income, the amount remaining for landlords will be 160 billion liras. While landlords currently pay 1 month's worth of their 12-month rental income to the state as tax, they may be forced to pay 2 months' worth of rent to the state under the new regulation.