Response from the Revenue Administration to the claim of a new tax on rental income

The Revenue Administration (GİB) announced that the proposed tax laws currently under discussion in the Turkish Grand National Assembly (TBMM) do not include any new tax regulations for rental income. The GİB issued a statement on the matter.

The statement, which stated that it was necessary to make a statement after seeing misleading posts on some social media platforms claiming that " a new tax on rents has been introduced," said, "There is no new tax regulation for rental income in the regulations made with the Bill of Law on Amendments to Tax Laws and Certain Laws and Decree Law No. 631, whose discussions are ongoing in the Turkish Grand National Assembly; however, exemptions are being removed."

In the statement, it was stated that according to the current provisions, residential rental income is collected without any deduction, and if the rental income exceeds the exemption limit (47 thousand lira), the income is declared in March of the following year and income tax is paid accordingly.

In the statement, it was reported that no declaration is submitted for rental income below the exemption limit, and the following information was given: "However, those who are required to declare their commercial, agricultural or professional earnings with an annual declaration, and those whose total amount of wages, movable capital income, real estate capital income or other earnings and income exceeds 1 million 200 thousand lira in the third bracket of the income tax tariff related to wages for 2025, regardless of whether declaration is required or not, do not benefit from the exemption. The new regulation will be applied to residential rental income obtained as of January 1, 2026."

"REGULATIONS ARE BEING MADE TO REMOVE EXCEPTIONS"

The statement noted that the proposed law preserves the exemption for retirees, widows, orphans, and those receiving disability pensions, while it will be abolished for those earning other rental income. The statement emphasized that Article 86 of the Income Tax Law is a regulation that should not be overlooked. Accordingly, annual income tax returns will not be filed for residential rental income that does not exceed the declaration limit of 18,000 lira.

In the statement, it was stated that those who choose the actual expense method will pay income tax on the amount remaining after deducting expenses listed in the law, such as lighting, heating, water and elevator, administration, maintenance and upkeep expenses and discounts related to the rented residence from the declared income, and the following was noted: "The exemption for retirees (47,000 lira) will be preserved with the current conditions, however, those who earn commercial, agricultural or professional income even if retired, or those whose other income exceeds 1,200,000 lira, will not be able to benefit from this exemption as they did in the past. In short, a new tax is not being introduced for residential rental income, and regulations are being made to remove the exemptions."