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| IMPORTANT ISSUES WHILE SELLING PROPERT? |
a) SALES VALUE OF REAL ESTATE IN LAND OFFICE
No matter what the price of the real estate which is being sold, at the title deed office a minimum price has to be indicated. For example, for the real estate which is to be sold in 2007, it is mandatory to increase the value which determined the real estate tax in 2006 at least in an amount equal to half of revaluation ratio, in other words at least by 3.9 % (Charges Law Art. 63 and EVK Art. 29). Accordingly, when you sell a real estate in 2007 which had 100.000 YTL real estate tax price in 2006, whether you sell it in June, December or any other time, the value at title deed has to be indicated at least as 103.900 YTL. Obviously, the price can also be any other price higher than this one. For example you can declare it as 150.000 YTL. But the charges have to be paid based on this price.
b) WHAT IF THE ACTUAL SALE PRICE OF THE REAL ESTATE IS LOW
If the real estates actual sale price is lower than the price used for calculating title deed charges, in order the actual sale price to be stated on the title deed certificate, seller has to make this request. In this case, the charges will be collected based on the price used for calculating title deed charges (tax value), but the actual sale price will be stated on the title deed certificate.
c) TAX TO BE PAID
During the real estate sale both the buyer and seller have to pay separately title deed fee equal to 15 %0 of the real estate title deed value.
d) TAXATION OF THE INCOME
1- Inheritance or Donation
If the sold real estate was obtained through inheritance or donation, what ever the sale price is, income tax will not be paid (GVK Repeated Art. 80/6).
2 If it is sold in five years
Real estates, beginning from the purchase date, if they are possessed for five years, what ever the sale price is, income tax will not be paid. But if it is sold within five years, income originated from this transaction will be subject to income tax (GVK Repeated Art. 80/6).
While calculating the income, total amount of costs (with the exception the month when the real estate is sold) will be increased according to monthly CPI (PPI) increases. But in order to be able to make this indexation the increase ratio has to be 10% or higher (GVK Repeated Art. 81/end). If a profit is made, the exceptional part will be subtracted and remaining part will be declared during the next year on 1-25 March (GVK Repeated Art. 80/3, Art. 92). If the calculated income does not exceed the exceptional amount, it will not be declared and no tax will be paid.
e) THE IMMOVABLES OF THE COMMERCIAL ENTERPRISES
If commercial enterprises sell real estates registered at their asset account, the declared minimum value from which title deed charges are calculated, the ratio of charges they pay are the same as explained above. Commercial enterprises have to issue invoices and also collect VAT because of real estate sale. Income earned from sale of real estate is subject to tax, too.
But, when enterprises sell a real estate which remains for at least two whole years in their asset account;
On condition of holding the money in a special fund account in the liability account until the end of the fifth year after the sale, they will pay corporation tax for 75% of real estate sales profit.
Sales activity cannot be held subject to VAT, either.
They do not pay income tax withholding, either.
f) NOTIFICATION OF THE SALE TO THE MUNICIPALITY
Sellers of the real estates, in the future may encounter demands for real estate tax and sanitation (waste) tax (for buildings out of residences). In order to avoid this situation, immediately after conducting real estate sale, it will be useful to explain the situation to the authorized municipality by submitting a petition. |
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