Selling Property in Turkey: Capital Gains Tax and the 5-Year Rule

Selling Property in Turkey: Capital Gains Tax and the 5-Year Rule

Every week clients sit with us in our Bomonti office who want to sell an apartment in Istanbul. Some bought a few years ago, some obtained Turkish citizenship with the property, and some simply want to move their capital back home. The first question is almost always the same: will I pay tax on the profit? The answer depends mainly on one date: the day the title deed (tapu) was registered in your name.

The 5-year rule

Under the Turkish Income Tax Law (Gelir Vergisi Kanunu, repeated article 80), the profit from selling real estate you bought is taxed as değer artışı kazancı (value-increase or capital gain) only if you sell within five years of acquiring it. Once five full years have passed, an individual's gain on the sale falls outside this tax.

• The five years run from the acquisition date, which is normally the tapu registration date. For some cooperative or TOKİ homes, the documented date of actual handover can be accepted.
• The rule applies to apartments, villas, land and shops alike. It makes no difference whether you lived in the property.
• Property you received by inheritance or as a gift is outside this tax, however long you held it.
• Frequent, organised buying and selling can be treated as commercial income instead, which is taxed under different rules.

Did the rule change for properties bought from 2025?

We hear this question a lot, mostly because of posts on social media. We checked the Revenue Administration (GİB) guidance for the returns filed in 2026 and the recent tax laws. As of October 2026, the 5-year rule for individuals applies in the same way to properties acquired in 2025 and 2026; we found no enacted change tied to the acquisition date. Recent omnibus laws such as Law No. 7524 (Official Gazette, 2 August 2024) and Law No. 7566 (Official Gazette, 19 December 2025) changed other real-estate rules, for example fund and corporate taxation, deductions on rental income, property-tax values and the penalty for under-declaring the price at the tapu office, but not the 5-year exemption for individuals. Taxing gains regardless of holding period has been debated in Turkey before, so check the law in force on the day you sell.

How the taxable gain is calculated

The gain is calculated in Turkish lira, not in dollars. This matters: if the lira weakened while you owned the property, you can show a large lira "gain" even if the dollar value barely moved. Indexation softens this effect.

Step 1: index the purchase price with Yİ-ÜFE

Your purchase cost can be increased by the change in the domestic producer price index (Yİ-ÜFE, published by TÜİK) between the month before you bought and the month before you sold, but only if the index rose by 10% or more over that period. In recent high-inflation years this condition has usually been met, but it must be checked for your exact months.

Step 2: deduct the costs of the sale

From the sale price, deduct the indexed cost plus the expenses and taxes you paid for the sale, such as your share of the tapu fee. Keep every receipt, and ask your accountant which purchase-related costs can be added to the cost.

Step 3: apply the annual exemption

A fixed amount of net gain is exempt each year: 120,000 TL for sales in 2025 and 150,000 TL for sales in 2026. If your net gain is below the exemption, you do not need to file. Above it, only the excess is taxed.

Step 4: progressive income tax

The remaining gain is added to your other declarable income for the year and taxed at progressive rates from 15% to 40%. The 2026 brackets for non-wage income are:

Hypothetical example (figures for illustration only): you bought for 4,000,000 TL and sell in September 2026 for 9,000,000 TL. Assume Yİ-ÜFE rose 80% between the relevant months, so your indexed cost is 7,200,000 TL. Your 2% seller's tapu fee is 180,000 TL. Net gain: 9,000,000 − 7,200,000 − 180,000 = 1,620,000 TL. After the 150,000 TL exemption, 1,470,000 TL is taxable. With no other declarable income, the tax would be 232,500 + 35% × 470,000 = 397,000 TL. Without indexation the bill would be far higher, which is why the exact index months matter.

Tapu fee on the sale

Separately from income tax, the title-deed fee (tapu harcı) is 2% for the seller and 2% for the buyer, 4% in total, calculated on the declared sale price. The declared price cannot be lower than the property's emlak vergisi (property-tax) value. A small revolving-fund (döner sermaye) service fee is added. Declare the real price: since Law No. 7566 the penalty for under-declaring is one times the missing fee (previously 25%), and tax offices have been writing to sellers to explain prices that look too low. Buyers and sellers sometimes agree a different split, but by law each side owes its own 2%.

When to declare and pay

The gain is declared on the annual income tax return between 1 and 31 March of the following year, so a 2026 sale is declared in March 2027. The tax is paid in two equal instalments: the first in March and the second by the end of July. You can file online through GİB's Hazır Beyan system or through an accountant (mali müşavir). If the deadline falls on a public holiday it moves, and GİB announces the new date.

Foreign sellers

The same rules apply to foreigners. What changes is how you file:

• Turkish tax residents, for example foreigners who stay in Turkey for more than six months in a calendar year, file the normal annual return in March.
• Non-residents (dar mükellef) with no annual-return obligation report the gain on a separate return (münferit beyanname) at the tax office where the property is located, generally within 15 days of the sale. Many of our clients give an accountant a power of attorney to handle this.
• Tax treaties generally let Turkey tax gains on property located in Turkey. Your home country may also tax the gain or give a credit, so check with an adviser there.

If you obtained citizenship with this property

Citizenship by real-estate investment requires a purchase of at least USD 400,000 with a tapu annotation (şerh) committing you not to sell for three years. Until the three years pass, the tapu office will not process a sale. Plan for two things:

• Years three to five are still inside the 5-year rule. If you sell after the citizenship restriction ends but before five years from acquisition, the gain is taxable as described above.
• Your buyer cannot use the property for citizenship. Under the rules in force since February 2023, property owned by someone who became a citizen through investment cannot be used for a new citizenship application. This narrows your buyer pool, so price accordingly.

Transferring the proceeds abroad

Turkey's foreign-exchange regulation (Decision No. 32 on the Protection of the Value of the Turkish Currency) allows non-residents to transfer the sale proceeds of their Turkish real estate abroad through banks. In practice:

• Receive the payment into a Turkish bank account in your name, not in cash.
• Keep the tapu sale documents and proof of payment; the bank will ask for them under anti-money-laundering (MASAK) rules.
• If you are paid in lira, you convert at the bank before sending. Large transfers can take a few days of compliance checks.

Before you sell: a short checklist

1. Find your tapu registration date and count five years to the day.
2. Collect your purchase documents, payment proofs and receipts.
3. Ask an accountant to run the Yİ-ÜFE calculation for your exact months.
4. If you hold citizenship through the property, confirm that the three-year restriction has ended.
5. Agree the price and the tapu fee split, and open a bank account for the proceeds.

Important: tax rules, exemption amounts and rates change, often every January. This article reflects the rules we could verify as of October 2026. Confirm with a licensed accountant (mali müşavir) or lawyer before you act.

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