Bad news for landlords: Exception to be removed under AKP proposal, tax burden to increase

The legislative amendment proposal submitted to the Grand National Assembly of Turkey by the AKP concerns millions of landlords. If accepted, the tax exemption that has been applied to rental income for years will be removed, and the tax burden on property owners will increase significantly.

47 THOUSAND LIRA EXEMPTION TO BE REMOVED

According to a report by Halk TV, with the new tax package, annual income of up to 47,000 TL obtained from residential rents will no longer be tax-exempt. While earnings up to this amount are currently not subject to tax under the existing system, once the regulation comes into effect, landlords will be required to pay tax on the entirety of their rental income.

This change will lead to an average property owner paying approximately 7,000 TL in additional taxes per year.

ADDITIONAL TAX FOR EVERY INCOME LEVEL

The income tax tariff is currently applied as follows:

15% for rental income up to 158,000 TL,

20% for income between 158,000 and 330,000 TL,

27% for income between 330,000 and 800,000 TL.

With the removal of the exemption,

Those earning up to 158,000 TL in annual rental income will pay 7,050 TL,

Those earning between 158,000 and 330,000 TL will pay 9,400 TL,

Those earning between 330,000 and 800,000 TL will pay 12,690 TL in additional taxes.

BROAD SCOPE OF THE PROPOSAL

The proposal submitted by the AKP includes many regulations, ranging from military service debt payments to SGK premiums and exemptions on title deed fees, not just rental income. However, the removal of the exemption on rental income stands out as the most controversial topic of the proposal.

EXEMPTION FOR RETIREES AND BENEFICIARIES

The new regulation excludes retirees and citizens receiving widow's or orphan's pensions. The current 47,000 lira tax exemption will continue to be applied for this group.

News Source: 12punto