Valuable Housing Tax Postponed to 2021!

It was suggested that some provisions on valuable housing tax are added to Legislative Proposal on Geographical Information Systems and Amendment of Some Laws at the General Meeting of Grand National Assembly of Turkey (TBMM) yesterday, and such articles were accepted and added to the Legislative Proposal.

Some remarkable issues in the mentioned Legislative Proposal are as follows:

  • According to Provisional Article 24 planned to be added to Law no. 1319 with the abovementioned Legislative Proposal, it is projected that the implementation of Valuable Housing Tax (VHT) will start as of 2021, and that values determined by the General Directorate of Land Registry and Cadastre before publication date of such Law will not be taken into consideration. The mentioned article is as follows:

    PROVISIONAL ARTICLE 24- Valuable Housing Tax liability regulated under “Section Four” of this Law shall start as of the beginning of 2021. Tax returns required for 2020 in 2020 shall not be submitted, and no tax is accrued.

    Values determined by the General Directorate of Land Registry and Cadastre before publication date of the Law covering this article shall not be taken into consideration.”
    (For the Legislative Proposal, see (only in Turkish):
    https://www.tbmm.gov.tr/tutanak/donem27/yil3/ham/b05401h.htm)
  • On the other hand, the practice of valuation by the General Directorate of Land Registry and Cadastre shall be ceased in the upcoming period, and the building value determined according to Article 29 of Real Estate Tax Law shall be taken as the basis in the payment of VHT. Within this scope, annulment of Article 43 “Determining, Announcing and Finalizing Taxable Values” of Law no. 1319, which grants valuation authority to the General Directorate of Land Registry and Cadastre and regulates the method for objection, is projected with Article 20 of the Legislative Proposal.
  • In addition, tax rates were also changed. With the abovementioned Legislative Proposal, it is projected to amend Article 44 of Law no. 1319. Accordingly, residential properties subject to VHT
    • with a value between TRY 5,000,000 and TRY 7,500,000 (included) shall be taxed by 3 per thousand for the portion exceeding TRY 5,000,000,
    • with a value up to TRY 10,000,000 (included) shall be taxed by TRY 7,500 for the portion of TRY 7,500,000 and by 6 per thousand for the portion exceeding such amount,
    • with a value above TRY 10,000,000 shall be taxed by TRY 22,500 for the portion of TRY 10,000,000 and by 10 per thousand for the portion exceeding such amount.

From this perspective, it is clearly stated in the article that the VHT practice shall start in 2021 and the valuation procedures conducted by the General Directorate of Land Registry and Cadastre until such time shall not be taken into consideration according to the Legislative Proposal accepted at the General Meeting of TBMM on 11.02.2020. In this respect, it is clear that valuation procedures conducted by the General Directorate of Land Registry and Cadastre in the previous period should be legally annulled in the event that such provisions become law as accepted at the General Meeting of TBMM. Therefore, it seems probable that lawsuits brought with the request of cancelling valuation procedures by the General Directorate of Land Registry and Cadastre will be finalized as “no need to decide” by Courts because the lawsuits will have no subjects in the event that the Legislative Proposal becomes law as accepted at the General Meeting of TBMM.

However, we would like to remind you that the abovementioned Legislative Proposal has not become law and entered into force yet, and kindly submit the articles for your information below.

The following articles of Legislative Proposal accepted in the first session of TBMM on 11.02.2020 regarding valuable housing tax were taken from the TBMM website (see -only in Turkish-:https://www.tbmm.gov.tr/tutanak/donem27/yil3/ham/b05401h.htm”).

“ARTICLE 19 – In Real Estate Tax Law no. 1319 dated 29/7/1970;

a) The expression “building tax value or value determined by the General Directorate of Land Registry and Cadastre is 5,000,000 Turkish lira and...” in the first subparagraph of Article 42 was amended to “building tax value determined as per Article 29 is 5,000,000 Turkish liras”.

b) The expression "It is found out that the value of the residential property, building tax value or value determined by the General Directorate of Land Registry and Cadastre exceeds the amount specified in Article 42 (including this amount)” in the third subparagraph, subclause (a) of Article 45 was amended to "Building tax value of the residential property exceeds the amount specified in Article 42”.

c) The expression “and of universities” in the first subparagraph, subclause (a) of Article 46 was amended to “of universities and of Housing Development Administration”, and subclause (b) was amended as follows:

“b) The residential property with the lowest value subject to valuable housing tax, belonging to persons having a single residential property and multiple residential properties within the boundaries of Turkey (including possession of usufructuary right) (In the event that such persons have shares of a single residential property, this provision is applicable for the portion of their shares).”

ç) The expressions “the value determined by General Directorate of Land Registry and Cadastre” and “(including this amount)” in the first subparagraph of Article 47 were removed.”

“ARTICLE 20 – Article 43 of Law no. 1319 was annulled.”

ARTICLE 21 – Article 44 of Law no. 1319 was amended as follows:

"ARTICLE 44 - The tax base is the building tax value portion exceeding the amount specified in Article 42.
Residential properties subject to Valuable Housing Tax with a value between TRY 5,000,000 and TRY 7,500,000 (included) shall be taxed 3 per thousand for the portion exceeding TRY 5,000,000, with a value up to TRY 10,000,000 (included) shall be taxed by TRY 7,500 for the portion of TRY 7,500,000 and by 6 per thousand for the portion exceeding such amount, with a value above TRY 10,000,000 shall be taxed by TRY 22,500 for the portion of TRY 10,000,000 and by 10 per thousand for the portion exceeding such amount.

For condominium-principled ownership and joint ownership, total value of the residential property is taken as the basis for the calculation of tax base.

The upper and lower limits of values of residential properties constituting the basis of the amount stated in Article 42 and tax rates stated in the second subparagraph are raised every year according to the previous year, by half of the revaluation rate determined as per the provisions of Tax Procedure Law no. 213. For amounts calculated accordingly, fractions up to 1,000 Turkish liras are not taken into consideration.

The President is entitled to raise the increase rate stated as ‘by half of the revaluation rate’ in the fourth subparagraph up to the revaluation rate.      

 “ARTICLE 22- The following provisional article was added to Law no. 1319.

PROVISIONAL ARTICLE 24- Valuable Housing Tax liability regulated under “Section Four” of this Law shall start as of the beginning of 2021. Tax returns required for 2020 in 2020 shall not be submitted, and no tax is accrued.

Values determined by the General Directorate of Land Registry and Cadastre before publication date of the Law covering this article shall not be taken into consideration.”

 “The President is entitled to extend the periods in this article for up to one year.”

RELATED PAGES
Search
Cookies are used on this website to improve the user experience and to ensure the efficient functioning of the website. By using this website, you agree to the use of these cookies. For detailed information about how we use, delete and block cookies, please read the Cookies page .Accept and Close