A newly proposed tax bill in Türkiye could double the annual tax burden for property owners who rent out their homes, including Turkish citizens and foreign investors. The reform comes amid rising rental prices following recent earthquakes that have reshaped Istanbul’s housing market.
The 36-article fiscal package, submitted to Parliament by lawmakers from the ruling Justice and Development Party (AK Party), eliminates the longstanding ₺47,000 ($1,120) rental income exemption. This change would require all landlords—local and foreign—to declare full rental earnings starting in 2027.
According to the Treasury and Finance Ministry’s impact analysis, the average property owner will pay ₺15,000 ($360) more in taxes annually, effectively handing over two months’ rent to the state instead of one. The reform is expected to affect 1.5 million homeowners and generate ₺22 billion ($520 million) in additional revenue.
Only retirees, widows, orphans, and people with disabilities will retain the exemption.
Who Will Feel the Pinch
In 2024, around 2 million landlords declared rental income using the exemption. Half a million of them—mostly retirees and dependents—will continue to benefit. The remaining 1.5 million, largely working homeowners and investors, will lose the privilege entirely.
Critics argue the reform will disproportionately impact the middle class and small-scale investors, especially those relying on rental income amid high inflation. Local media have dubbed the change “10 rents for the landlord, two for the state,” reflecting the new tax ratio.
Between Profit and Policy
Despite the looming tax hike, Türkiye’s real estate market remains attractive, with strong rental yields in cities like Istanbul and Antalya. However, rising taxes, maintenance costs, and compliance rules are prompting foreign investors to reassess their long-term strategies.
If implemented, the reform will mark one of the most significant shifts in Türkiye’s property taxation in years—reshaping the landscape for millions of landlords by 2027.
