Turkey has become a property hotspot over the years owing to the depreciation of the Turkish Lira and favorable incentives from the Turkish Government for investors, especially in the real estate market.
If you are thinking about making a buy to let investment, or looking to rent out your Turkish holiday home for extra income, these are the things you need to know.
If you are planning to let out your property long term, and are not familiar with the Turkish laws or the language, it’s best to get a lawyer to help you, especially when drawing up the contract.
It is not a good idea to just take verbal agreements for rental payments. You may wish to save some money by not hiring a lawyer but if don’t receive the rental payments and get a squatter situation you could have a difficult time in removing the tenants, with no legal backing.
After the contract has been finalized it’s a good idea to have it notarized so that both parties are aware of, and have understood their responsibilities.
The value of the property and where it’s located will be a huge part of how much income you will gain. If you have a villa in the Fethiye region, it will provide you with a much higher rental yield, due to being located in a resort area.
It is customary, and should be written in the contract that the first month’s rent is usually paid up front. The tenant is also expected to pay a deposit in case of possible damages.
If renting seasonally, some landlords ask for 5 or 6 month’s rent up front, eliminating the need to collect every month.
Turkish Law does state that any rent above 500TL should be paid via a bank transfer to ensure proof of payment if needed.
For short term rentals, you need to be aware of the latest amendment in the ‘Identity Declaration Law’. The amendment states that if the property is marketed as a holiday rental, the landlord has to register the names of the tenants in the government’s GIYKIMBIL System (Gecici Ikamet Yerleri Kimlik Bildirme Sistemi).
It really does not matter if your tenants will only be staying a night or two. You as a landlord are legally obliged to submit their names into the system.
If you fail to declare occupants, it can result in a 700TL fine per day.
The jandarma will do a background check on the tenants after registration. This measure was put into place to combat terrorist activities.
How to register your tenants in GIYKIMBIL
Firstly you need to visit the local jandarma station, and they will provide you with access to the software by issuing you with a password.
There is no fee for this.
If you have a Turkish Kimlik ID or a work permit you will be able to sign up onto the system easily. However, if you do not have either of these you will need to establish your own business with a tax number.
If the password is issued in your name, you are legally responsible for submitting the names.
If you have used an agency or property management company to handle your property rental, they will be the ones to submit all information. The management company will also be asked for written proof that they are looking after your property and both sides will have to provide identification.
It does not matter how long the length of your tenants stay, but for any amount you earn, that exceeds 5400TL annually, you must declare all income from your rentals to the tax office.
If you have your own business, you can claim utilities such as electricity, water and internet as tax- deductable.
Tax payments for the year are collected in 2 installments during the following year. For example, for 2021 rental income, you should pay your tax in March and July 2022.
The amount of tax you pay will depend on what you earn and is normally around 15% or more. Of course, if you are a foreign national you will need a tax ID to complete this.
Should you use a letting agency to rent out a property in Turkey?
If you decide to use an agency, it will definitely expand your target market. They can also help you set up and give you suggestions about the best areas and more rentable types of properties as well as advertising.
They will normally charge around 15% for the service they provide.
How to advertise Social media is a great place to start. There will be many groups connected to the location of your property that will allow you to share to a large audience.