NEWSROOM

Those who sell their house less than five years after the date of purchase may turn to show the price of their house lower in the title deed to pay less Real Estate Value Increase Gain Tax. Misrepresentations made to make short-term profits tax homeowners 900% more.

*** This release is originally published in Turkish.

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ISTANBUL (TR) - According to Article 80 of the Income Tax Law, those who sell their house, other than inheritance and donation, within five years from the date of purchase must pay Real Estate Value Increase Tax. Those who misrepresent the sales value of their house in the deed to pay fewer taxes may face high tariffs. In addition to the unpaid missing amounts, significant fines await those who make improper declarations in the title deed.

İbrahim Çolak, Content Manager of the credit and insurance comparison platform Hesapkurdu.com, stated that the low sales price of the real estate poses a risk for both homeowners and potential buyers and said, “It also faces a large number of fines. After the penalties associated with under-declaring the sales price and paying a low title deed fee, more accurate prices began to be declared in the title deed. This situation has increased the values ​​of the houses appearing in the title deed. Those who show a low value when buying their house, when they sell their house after five years, show the real value, it seems that they have made much profit due to the difference in buying and selling. However, the tax amounts paid are also multiplied due to this high profit. On the other hand, potential buyers may have to pay higher income tax when they want to sell their house in the future.”

900% more tax

Noting that the sale of the house bought by making a false declaration in the next period, based on the actual statement, may cause the owners of the house to lose more than 50 thousand TL, İbrahim Çolak said, “A house declaring the value of the house bought for 350 thousand TL in January 2018 as 200 thousand TL in the deed. When the owner puts his house up for sale in January 2022 after four years, they may have to pay 53 thousand TL Value Increase Tax if they declare the actual value reached this time, which is 900 thousand TL. However, if the actual price were declared 350 thousand TL when purchasing the house, only a 6 thousand TL title deed fee would be paid. The difference is almost 900%. To avoid such situations, it is essential to declare the title deed fee over the house's purchase price.”

Payments will be made in 2 installments in 2023

Stating that a declaration must be submitted by 31 March 2023 for the real estate sold this year, Hesapkurdu.com Content Manager İbrahim Çolak said, “As a result of the declaration they submitted to the Revenue Administration, they will be able to make their payments in 2 equal installments in March and July 2023. Real income is considered when determining the Real Estate Value Increase Tax. The real income obtained independent of inflation is found by calculating the difference between the purchase and sale value of the house, which is adjusted according to inflation. The exemption amount announced every year, the title deed fee paid at the time of purchase, and the sum of the interest paid until the sale of the housing loan, if used, are deducted from this income. So there is a ‘taxable amount.’ Tax brackets are applied to this amount. The payment can be made on the website of the Revenue Administration or through the tax offices.”