BEZ

Can anyone explain to me why the house value on the contract is considerably less than what Im having to Pay?
Both prices are detailed i.e. purchase price and the price that the house will be registered at (is this a tax perk for the seller)
Any help appreciated

lewismark

This is normal practice here, it is because, the value of the property on your contract is what the land registry office have the value resigtered as or there abouts, for the property you are buying, so you will pay 3% tax of that amount each year as you property tax,(community charge)
You could of had the true purchase price put on if you wanted but it would mean you would pay more tax each year on your property,than you need to.
It is not a problem

I bought one of my apartments for 30,000€ and on the contract to be submitted to pay tax it was showing only 10,000€
Until the government revalue the properties this will continue to go on, but as i said is no problem and a legal loophope, so you dont pay more tax. Hope that you understand all that.

Lynda

I do not quite agree with the above - it is a loophole but it is not legal. If the Turkish government continue to bring its policies and procedures on line then this is an area that will be looked at. Yu have to consider capital gains tax - at the moment not an active concern but for how much longer? If the government tighten up on this potentially lucrative source of income, where will you or your heirs be when you come to sell your eg £50.000 property for say £75.000 but you only have £10,000 on your tapu??? Something to think about. at the moment the system is as stated but if you are looking for longer term investment then maybe you need to think what will be best for you in the future. Pay more tax now or later? At teh moment you have a choice.

BEZ

thanks a lot guys
Mike

jimm

You'll only pay capital gains tax on the difference between what you actually pay and what you sell for.This is regardless of what is on your tapu.
Get a receipt for the actual money changing hands.The difference between actual cost and tapu value can be put down to the developments costs ie pool,garden landscaping etc.

BEZ

cheers Jim-

lewismark

Also there would be maintenance costs on top of your purchase price as in my case i spent another 12000€ refurbishing so this would also at some point have to go onto the cost of my property and you dont have to go the tapu office and add these costs even if you did register at the true purchase price, The contract says exactly what was paid for the property and the payment structure, so should this capital gains tax be introduced they would have to some how include this in the laws as many buyers register less than the price paid.
When you go to the Tapu the cost is clearly lower than you pay and they know this as i handed over the true price in cash to the seller in the Tapu office and obtained a recieipt from Tapu office to show exactly how much i paid and it was paid in full.

lorraine

In Turkey the Tax Assessment Commission sets an assessed value for properties, on which tax calculations are based. This assessment is conservative the Turkish government decides how much tax is due. Should you declare the true value other than the value assessed by the govenment then you will pay much more tax than is required legally.
Now this will only save you money if you decide to sell the property and the next purchaser agrees also to the lesser figure put on their Tapu, otherwise you will be paying higher capital gains tax.

Therefore, an example of this:
My house cost £45k but declared Tapu 25,000Tl (approx £12.500K) should I decide to sell and the buyer agrees to the new value, then this is what will be used, 40,000Tl (£20K approx) therefore the profit would be 15,000Tl (approx £7.5k) as the first 12,000 is disregarded as tax free, the tax will now be due on 3,000Tl, therefore 25% tax is due on the 3,000Tl which equates to 750Tl (approx £320)

(25% is for private individuals)

Capital gains tax is only payable in Turkey is a property is sold within 4 years of purchase. (this is when you find out how good your agent is)


Now isnt this as clear as mud!! and no i am not selling my house for 40,000Tl so dont ask

bryn

Lorraine is correct it what she is saying unlike some other members!!
the property tax is 0.3% per annum not 3% as previously stated and unless you have the Fatura for all improvements made the tax people will not even entertain you and even if you do have them you would still struggle to have home improvements allowed for against Capital gains.