Property Taxes in Bodrum: A Comprehensive Guide

Property Taxes in Bodrum: A Comprehensive Guide

Well established as a highly sought after destination for international property buyers, Bodrum offers beautiful coastlines, a Mediterranean lifestyle similar to that of Spain, Italy or Greece, and an attractive real estate market. Understanding property taxes in Bodrum is essential to ensure a smooth buying process and financial planning, so this guide outlines everything you need to know about property taxes, including purchase taxes, ongoing taxes, taxes for non-residents, and additional costs.

The Basics of Buying Property in Bodrum

Before purchasing property in Bodrum, it is crucial to have some understanding of the legal and financial aspects involved. Foreign buyers can legally own property in Turkey, provided the property is outside military zones. The process involves selecting a property, obtaining a tax number, opening a Turkish bank account, signing a sales agreement, and registering the title deed.

Property Purchase Taxes in Bodrum

When buying a property in Bodrum, buyers must be aware of the following taxes:

• Title Deed Transfer Tax (Tapu Harcı): This tax is typically 4% of the declared property value and is usually shared between the buyer and seller (2% each), though in practice, buyers often cover the full amount.
• VAT (Value Added Tax): For foreign investors purchasing new properties from developers, they will be exempt from the 18% tax rate, however, some may wish to charge a small percentage. Always best to check directly with your agent and lawyer, so there’s no surprises come completion.
• Stamp Duty: Applicable if a contract is signed before the title deed transfer, usually around 0.948% of the contract value.
• Notary and Legal Fees: If a notary is involved, the fees may range from €200–€500.

Ongoing Property Taxes in Bodrum

Once you own a property in Bodrum, ongoing taxes apply:

• Annual Property Tax (Emlak Vergisi): Calculated based on the property's declared value.
  • 0.2% for residential properties
  • 0.4% for commercial properties
  • 0.1% for land
• Environmental Tax: A minimal charge linked to waste management services, usually added to water bills (approximately €10–€30 per year).
• DASK (Compulsory Earthquake Insurance): Required by law and costs around €50–€150 per year, depending on property size and location.

Tax for Non-Residents

Foreign property owners in Bodrum should be aware of specific tax obligations:

• Rental Income Tax: If renting out the property, non-residents are subject to rental income tax. The tax rates are progressive, ranging from 15% to 40% on rental earnings exceeding the annual tax-free allowance.
• Capital Gains Tax: If you sell the property within five years of purchase, capital gains tax applies, with rates from 15% to 35%. After five years, sales are exempt from capital gains tax.
• Inheritance and Gift Tax: Property inherited in Turkey is subject to inheritance tax, ranging from 1% to 10% depending on the value.

Additional Costs to Consider

In addition to taxes, buyers should consider other expenses:

• Real Estate Agent Fees: Typically 2%–3% of the sale price.
• Utility Connection Fees: Setting up electricity, water, and internet may cost between €200–€500.
• Maintenance Fees: If purchasing in a complex, monthly fees for shared facilities may range from €50–€200.
• Legal Fees: Hiring a lawyer for due diligence and contract review may cost around €1,000–€2,500.

Selling a Property in Bodrum

When selling property in Bodrum, taxes and costs include:

• Capital Gains Tax (if applicable) within five years of ownership.
• Title Deed Transfer Tax (typically borne by the buyer but negotiable).
• Real Estate Agent Commission, which may be around 2% of the sale price.
• Legal and Notary Fees, if necessary.

Conclusion

Understanding property taxes in Bodrum is essential for anyone considering buying or selling real estate in this stunning Turkish destination. From purchase taxes to ongoing fees and non-resident obligations, being informed helps in making financially sound decisions. Consulting with a professional tax advisor and a real estate expert ensures compliance with regulations and a hassle-free property transaction.

If you're considering purchasing property in Bodrum, ensure you account for these taxes and additional costs to enjoy a seamless investment experience in Turkey's prime coastal region.

Yalihan International, associate members of Forbes Global Properties, are extremely well placed to help you with your property search in Bodrum. We will guide you through every step of the process and will give you expert guidance, a personalised property search, investment consulting, legal support and relocation services. Please contact us if you’d like to discuss your options & ambitions within the Bodrum Property Market.