Pursuant to the Law on Geographic Information Systems and Amendment of Some Laws (“Amendment Law”) with the number 7221 published in the Official Gazette dated 20 February 2020 and numbered 31405, some amendments have been made to the Property Tax Law numbered 1319 (“Law”). In accordance with these provisions, it has been set forth that properties havingmore than 5.000.000 Turkish Liras tax value determined in line with article 29 of the Law qualified as residences, which are located within the borders of Turkey, will be subject to the valuable residence tax.

As per the Amendment Law, a new institution has been added to the exemptions of the valuable residence tax and it has been regulated that the properties qualified as residence,ownership or usufruct right of which,belong to Housing Development Administration of Turkey are not subject to valuable residencetax. Furthermore, paragraph 1(b) of article 46 of the Law regarding the exemptions has been amended as “The properties qualified as residence,ownership or usufruct right of which,belong to persons who own only one property and the property qualified as residence having the lowest price which is subject to valuable taxand belong to persons who own more than one property within the borders of Turkey (including the ownership of usufruct rights) (This provision is applicable also  to the shares of those who own shared property).”

            Article 44 of the Law has been also amended as follows:

“The tax base is the amount of the building tax value which exceeds the amount stated in article 42. The taxation ratio of the properties subject to valuable residence tax is as stated below:

Residences with a value between 5.000.000 and 7.500.000 TRY (including this amount)

For the amount exceeding 5.000.000 TRY                                                    (3 per thousand)

Residences with a value up to 10.000.000 TRY (including this amount) 7.500 TRY for 7.500.000 TRY

For the amount exceeding                                                                             (6 per thousand)

Residences with a value more than 10.000.000 TRY 22.500 TRY for 10.000.000 TRY

For the amount exceeding                                                                             (10 per thousand)

In shared and joint ownerships, the calculation of the tax is based on the total value of the property qualified as residence. The amount stated in article 42 of the Law and the lower and upper limits of the value of these properties subject to the tax ratios stated in paragraph 2is increased every year at the rate of half of the re-determination value in accordance with the provisions of Tax Procedural Law numbered 213. The fractions up to 1.000 Turkish Liras of the calculated values are not taken into account.

The President has the right to increase the rate which is the half of the re-determination value up to the re-determination ratio.”Following this amendment, it can be said that valuable residence tax amount has decreased.

In accordance with the Amendment Law, article 43 of the Law regarding the notifications of the value determination of the properties qualified as residence and the finalization and objection periods has been abolished.

Finally, the below stated provisional article has been included within the Law:

“The liability regarding the valuable residence tax shall start as of the beginning of 2021. The 2020 tax declaration, which shall be submitted in 2020, will not be submitted and the tax will not be accrued. The values determined by the General Directorate of Land Registry and Cadastre before the publication date of the Law enforcing this article will not be taken into consideration. The President has the right to extend the periods stated in this article up to one year.”

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