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110 thousand taxpayers who sold their houses within 5 years of the date of purchase met on the website of the Revenue Administration for the declaration of value increase. Large fines await those who make false statements to pay low taxes, along with underpaid amounts.

*** This release is originally published in Turkish.
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ISTANBUL (TR) - Those who sell their house less than 5 years after the date of purchase must submit a declaration for the Real Estate Value Increase Tax until March 31. Those who complete the sale of their house in 2021 will be able to make their payments in 2 equal installments, in March and July, as a result of the declaration they submitted to the Revenue Administration. In addition to unpaid missing amounts, large fines await those who make illegal declarations in the title deed to pay low taxes.

İbrahim Çolak, Content Manager of Hesapkurdu.com, a credit and insurance comparison platform, noted that the Real Estate Value Increase Gain Tax is determined according to the real income obtained from the house, and said, “According to article 80 of the Income Tax Law, the residences owned by inheritance and donation Others are subject to capital gains tax when they are sold within 5 years from the date of purchase. Housing owners must submit a declaration to the Revenue Administration (GİB) by the end of this month. However, some real estate owners may make false statements to reduce the Real Estate Value Increase Tax. When this situation is detected, real estate owners are liable to pay the missing taxes, while at the same time they are faced with a large amount of penalties.”

Poses a risk to the landlords

Stating that the low sales price of the real estate poses a risk for the house buyers, İbrahim Çolak said, “When the house buyers put the real estate up for sale later, they may have to pay higher income tax. Those who show low value when buying their house seem to have made a profit because of the high difference when they sell their houses at their real value within 5 years. However, due to the high profit, the tax amounts paid are also multiplied. Recently, deterrent fines against under-declaration of the sales price and low title deed fees have begun to pay off. The number of unlawful declarations is gradually decreasing.”

Hesapkurdu.com Content Manager İbrahim Çolak gave the following example on the subject: “The owner of the house, who declared the value of the house he bought for 450 thousand TL in January 2020 as 250 thousand TL in the deed, when he put his house up for sale in December 2021, which is the real value of the house. If he/she makes a declaration of 700 thousand TL, he/she may have to pay the Value Increase Gain Tax of approximately 50 thousand TL. However, if the real price was declared as 450 thousand TL when purchasing the house, only an additional amount of title deed fee would be paid. In order to avoid such situations, it is absolutely necessary to declare the title deed fee over the purchase price of the house.

How is Real Estate Value Increase Tax determined?

İbrahim Çolak, who said that the real income was taken into account in the determination of the Real Estate Value Increase Gain Tax, clarified the subject with the following words: “The real income obtained independent of inflation is found by calculating the difference between the purchase and sale value of the house, which is regulated according to inflation. The exemption amount announced every year, the title deed fee paid at the time of purchase and, if a housing loan is used, the sum of the interests paid until the sale is deducted from this income. Thus, "taxable amount" is found. Tax brackets are applied to this amount.”