Under the Turkish Income Tax Law, rental income obtained by property owners from residential or commercial leases is classified as "Income from Immovable Property" (GMSİ). Property owners are legally required to declare this income within the specified period. However, the law provides exemptions and deductible expenses to minimize tax liabilities for qualifying owners.

1. Residential and Commercial Exemption Limits

Tax calculations depend on whether the property is leased for residential or commercial purposes:

  • Residential Property Exemption: Each calendar year, the government sets an exemption limit for residential rent (mesken istisnası). If the owner's total annual residential rent is below this threshold, they do not need to file a tax return. If it exceeds the limit, only the portion above the threshold is subject to income tax.
  • Commercial Property Declaration Limit: In commercial leases, the tenant usually deducts withholding tax (stopaj) at source on behalf of the owner. The owner must file a declaration only if their gross commercial rental income exceeds the annual declaration limit.

2. Tax Return Filing and Deductible Methods

The rental income tax return must be submitted between March 1 and March 31 of the year following the receipt of income. Taxpayers can select one of two methods to calculate net income: For more details, consult our tax lawyer.

  • Lump-Sum Expense Method (Götürü Gider): Taxpayers can deduct a flat 15% of their net rental income (after subtracting the residential exemption) as expenses, without providing any invoices or receipts.
  • Actual Expense Method (Gerçek Gider): Taxpayers can deduct actual maintenance, interest, depreciation, and insurance expenses directly related to the property, provided they keep valid invoices. Choosing this method locks the taxpayer for 2 years.

For detailed information and legal consultation, you can visit our Tax Law page, or request an appointment via our Contact page.

Frequently Asked Questions on Rental Income Tax

When should the rental income tax return be filed?

The tax return must be filed between March 1 and March 31 of the following calendar year using the online portal (Hazır Beyan Sistemi) or at local tax offices.

How many installments are allowed for tax payments?

Income tax is paid in two equal installments: the first installment by March 31, and the second installment by July 31.

Is rent tax paid if a family member lives in the property for free?

No tax is calculated if parents, spouses, children, or siblings live in a residential property for free (limited to one property per family member). For other relatives or friends, equivalent rental tax rules apply.

What is the deduction rate for lump-sum expenses?

Under the lump-sum expense method (götürü gider), you can deduct a flat 15% of the net income as automatic expenses without providing any invoices.

What is the penalty for not declaring rental income?

Failing to declare results in losing the residential tax exemption. You will be subject to tax loss penalties (vergi ziyaı cezası) equivalent to the tax amount, along with monthly interest.