Rental Income Tax in Turkey for Foreign Property Owners

If you own an apartment, house or commercial property in Turkey and rent it out while living abroad, you may have tax obligations in Turkey.

Foreign property owners often assume that living outside Turkey means they do not need to file a Turkish tax return. This is not necessarily correct. Rental income generated by real estate located in Turkey may be subject to Turkish income tax, even if the owner resides in another country.

This guide explains the main Turkish rental income tax rules for foreign property owners, including non-resident taxpayers, declaration requirements, exemptions and deductible expenses.

1. Do Foreign Property Owners Pay Tax on Rental Income in Turkey?

Yes. Rental income generated from real estate located in Turkey may be subject to Turkish income tax, regardless of whether the property owner is a Turkish citizen or a foreign national.

Under the Turkish Income Tax Law, individuals who are not tax residents in Turkey may be subject to limited tax liability in respect of income generated in Turkey.

This means that a foreign individual living abroad may still be required to declare rental income received from a property located in Turkey.

The relevant tax treatment depends on the owner’s tax residence, the type of rental income and any applicable double taxation agreement between Turkey and the owner’s country of residence.

2. Who Is Considered a Non-Resident Taxpayer?

A non-resident taxpayer is generally an individual who is not considered resident in Turkey for income tax purposes.

Under Turkish tax legislation, individuals who do not have their residence in Turkey and do not stay in Turkey continuously for more than six months during a calendar year are generally treated as non-residents, subject to statutory exceptions.

Non-resident taxpayers are generally liable to Turkish income tax only on income generated in Turkey.

For example, a foreign national who lives in Germany throughout the year but owns and rents out an apartment in Izmir may have a Turkish income tax obligation in respect of that rental income.

Turkish tax residence should nevertheless be assessed based on the individual’s actual circumstances and the applicable legislation.

3. Is There a Rental Income Tax Exemption?

Turkey provides an annual exemption for certain residential rental income received by individuals.

For the 2026 income year, the residential rental income exemption is TRY 58,000.

This exemption applies to qualifying residential rental income, subject to the statutory conditions. It does not automatically apply to commercial property rental income or every type of rental arrangement.

Where an individual receives rental income from several residential properties, the exemption is generally applied once to the total qualifying residential rental income, rather than separately to each property.

Eligibility may also be affected by other income, circumstances and statutory restrictions. Therefore, property owners should check whether they qualify before relying on the exemption.

4. How Is Rental Income Tax Calculated?

Turkish income tax is generally calculated on the taxable net rental income rather than simply the gross rent received.

Depending on the circumstances, taxpayers may generally choose between two methods for determining deductible expenses:

Actual expense method

Under this method, qualifying expenses related to the rental property may be deducted from the rental income, subject to the conditions and limitations in the Income Tax Law.

Depending on the circumstances, these may include:

• Expenses for maintenance and repairs.
• Insurance expenses relating to the property.
• Property taxes and certain other taxes and charges.
• Interest expenses relating to qualifying borrowing.
• Depreciation, where applicable.
• Other expenses specifically permitted under the legislation.

The taxpayer must retain appropriate supporting documents and comply with the statutory requirements.

Lump-sum expense method

Instead of deducting actual expenses, an eligible taxpayer may generally deduct a lump-sum expense equal to 15% of the rental income remaining after the applicable residential rental income exemption.

This method is subject to statutory conditions and restrictions. In particular, it cannot necessarily be used in every situation, and a taxpayer who elects this method must consider the applicable restrictions on changing methods.

The most suitable method depends on the property’s expenses and the taxpayer’s circumstances.

5. Do Foreign Property Owners Need to File an Annual Tax Return?

A foreign property owner may be required to file an annual Turkish income tax return if the rental income exceeds the relevant exemption or declaration threshold, or if another statutory declaration requirement applies.

For residential rental income, the TRY 58,000 exemption for the 2026 income year is an important threshold.

Commercial rental income is subject to different rules, particularly where the tenant is required to withhold tax at source.

The declaration requirement should therefore be assessed according to the type of property, the tenant and the payment arrangements.

A foreign property owner should not assume that the absence of a Turkish bank account or the receipt of rent in a foreign bank account removes the Turkish tax obligation.

6. What If the Property Is Rented to a Company?

Rental income from commercial properties may be subject to withholding tax where the tenant is legally required to withhold tax.

In such cases, the tenant may be responsible for withholding and paying the relevant tax to the Turkish tax authorities.

The landlord’s annual declaration obligation depends on the applicable rules, including the amount of rental income and whether tax has been withheld.

This is particularly relevant where a foreign property owner rents an office, shop or other commercial premises to a Turkish company.

The lease agreement and payment records should be reviewed to determine the correct tax treatment.

7. Can Foreign Property Owners Avoid Double Taxation?

A foreign property owner may also be subject to tax in their country of residence.

For example, an individual who lives in the United Kingdom or Germany and receives rental income from a property in Turkey may have reporting obligations in both countries.

Turkey has concluded double taxation agreements with numerous countries. Depending on the applicable agreement and the domestic tax rules, these agreements may provide relief from double taxation through mechanisms such as a foreign tax credit.

The availability and amount of relief depend on the relevant treaty and the taxpayer’s circumstances.

It is therefore advisable to review both Turkish tax obligations and the rules in the country where the owner is tax resident.

8. What Happens If Rental Income Is Not Declared?

Failure to declare taxable rental income may result in additional tax assessments, late-payment interest and tax penalties.

The Turkish tax authorities may identify undeclared rental income through information obtained from banks, tenants, public records and other reporting mechanisms.

Where undeclared income is identified, the taxpayer may lose certain tax advantages and face additional liabilities.

Foreign property owners should therefore ensure that their rental income is properly assessed and declared where required.

9. How Can You Declare Rental Income from Abroad?

Living outside Turkey does not necessarily prevent a foreign property owner from fulfilling Turkish tax obligations.

Depending on the taxpayer’s circumstances, the declaration and related procedures may be completed through the available electronic tax services or by an authorised representative in Turkey.

A properly authorised lawyer or tax professional can assist with reviewing rental income, determining whether a return is required and coordinating the necessary procedures.

Property owners should retain rental agreements, bank statements, expense invoices and other relevant documents.

Legal Assistance for Foreign Property Owners

Owning and renting out property in Turkey while living abroad can involve tax, contractual and administrative obligations.

E&G International Law Firm assists foreign individuals and international clients with Turkish real estate matters, including property transactions, rental arrangements, legal documentation and related procedures.

If you own property in Turkey and receive rental income while living abroad, our team can help you understand the relevant legal requirements and coordinate the necessary assistance.

Contact E&G International Law Firm to discuss your Turkish property and rental income matters.

This article provides general information and does not constitute legal or tax advice. Tax exemptions, declaration thresholds and filing requirements may change. The applicable rules should be checked for the relevant income year and the taxpayer’s individual circumstances.