The Communiqué on Valuable House Tax (“Communiqué”) was published on the Official Gazette dated January 15th 2021, and thus entered into force. The Communiqué aims to determine and clarify the procedures and principles concerning valuable house tax.
Below is a brief summary of the legal framework of valuable house tax.
What is Valuable House Tax?
Valuable House Tax is a type of tax that is accrued on residential immovable properties with a value exceeding 5 million Turkish Liras. The owner of the house or if applicable, the holder of any usufruct right on the house is responsible for filing and paying the tax.
“Building tax value” (a tax value that is calculated for property/land tax) shall be taken into account when the tax is accrued. Please note that property/land tax and valuable house tax are two different taxes.
The tax rates and amounts are as follows:
Between TRY 5.000.000 - TRY 7.500.000 : (0.3%) of the amount exceeding TRY 5.000.000
Between TRY 7.500.000 - TRY 10.000.000 : TRY 7.500 plus (0.6%) of the amount exceeding TRY 7.500.000
Values exceeding TRY 10,000,000 : TRY 22.500 plus (1%) of the amount exceeding TRY 10,000,000
These values, on the other hand, shall increase every year based on the formula set provided in the Law according to the revaluation rate.
For 2021, the above-mentioned figures are roughly as follows:
Between TRY 5.227.000 - TRY 7.841.000 : (0.3%) of the amount exceeding TRY 5.227.000
Between TRY 7.841.000 - TRY 10.455.000 : TRY 7.841 plus (0.6%) of the amount exceeding TRY 7.841.000
Values exceeding TRY 10,000,000 : TRY 23.524 plus (1%) of the amount exceeding TRY 10.455.000
Tax Returns & Payments
Taxpayers must submit their tax returns concerning valuable house tax to the tax office where the house is located by February 20th 2021.
The accrued taxes are to be paid in two equal installments by the end of February and August in each year.
Exemptions
There are a number of exemptions for within the law. The most striking one is that house owners who own only one valuable house as per the law shall be exempted from the valuable house tax.
If a person owns more than one valuable house, the exemption applies only for the least valued house. The rest shall be taxed accordingly.
Objection / Litigation
If a person would like to object to the tax or its assessment, the tax return must be submitted with a reservation. Then, a lawsuit must be filed before a tax court within 30 days of submission of the tax return.
However, the reservation does not stop the payment process of the tax. For this process to be halted, the tax court must decide to suspend the execution of the process.