A Guide To Short Term Kalkan Property Rentals
Complying with Turkish Tax rules
In 2018 the system for short term or holiday rental taxable income changed.
It is now required that private owners of holiday rental property, run their rentals as a business set up similar to that of a “Sole Trader” in the UK. The information given below is specific to the sole trader set up and does not consider owners of property in village areas who may have formed limited companies in order to purchase their property in the first place.
If you intend on renting your Kalkan property as an investment you will need to appoint a local Turkish accountant and take a business license (Vergi Levhasi).
Additionally, you will need to register your guests’ passport or ID information online with Jandarma on arrival and check them out on departure. (For the time being as well owners are also required to keep a manual daily guest book of the names of each guest staying at the property which is filled in daily.)
On departure you will be required to issue a rental sales invoice in Turkish Lira in the lead guests name to include the property name and number nights stay. This system moved to an online invoice system in 2022. Additionally the rental income should be deposited in TL into a Turkish bank account with reference of the invoice number.
The basic principles of rental income taxes are as follows:
- 20% VAT called KDV on rental sales.
- 2% rental tax
- Annual profit tax which is between 15% and 40% according the amount of profit made. For the tax year 2023 the brackets are as follows:
0TL to 70,000TL: 15%
70,000TL – 150,000TL: 20%
150,000TL – 550,000TL: 27%
550,000TL – 1,900,000TL: 35%
- In addition there are some standard additional annual taxes to be paid connected with the business license but these tend to be small and vary each year.
However cost allowances are generous:
- All annual overheads such as insurances, property management/site fees, water, electric, internet, council tax provided they are submitted with a legal invoice from the supplier.
- There is no apportionment made for the part of the year the property is not rented out.
- 20%/year of any capital investment over a period of 5 years for renewal and repairs if submitted with legal invoice from the supplier.
- Sales VAT/KDV may be offset with VAT/KDV on costs/purchases although the rates vary.
For further advice on renting property as a business, the estimated costs and tax estimates please contact us for a one to one consultation.