How to rent out your property in Turkey
So, we have already covered how to rent a place in Turkey, but what if you want to be on the landlord side of things?
Here is a simple guide on renting out your own property and doing it right by being tax compliant.
Turkey has emerged as a property hotspot in recent years, owing to the depreciation of the Turkish lira and favorable incentives for investors, especially in the real estate market.
If you are looking to making a buy to let investment or looking to rent out your property as a holiday home or year-round for a steady income, there are things you should know.
If you are planning to rent out your property long-term and are not familiar with the laws or the language, it may be best to visit a lawyer to assist you every step of the way, especially when preparing a contract.
Warning: Don’t take verbal agreements as a guarantor of regular rent payments. You may not want to write up a contract and save yourself some money by not hiring a lawyer, but if you have a squatter situation at hand, you will have a hard time kicking them out with no legal backing.
Also, after you have finalized the contract, make sure to notarize it so that both parties are aware of and understand their responsibilities.
The link between location and rental yield
The initial value of your property and its location will be a significant determinant of your income. For example, a villa in Bodrum’s Yalıkavak neighborhood or Antalya’s Kalkan district will provide you with a higher rental yield. These locations are resort areas (with harbors/marinas), renowned for drawing crowds higher up on the socioeconomic scale.
Whereas if you have a property in Adana or Mersin, you should expect to receive much less despite them being on the Mediterranean coast like Antalya.
Istanbul, the most expensive place in the country, has the highest prices for rent, owing to it being a commercial hub and cosmopolitan centre. Rents, on average, begin at TL 2,500.
Rent and contracts
As is customary (and written in the contract), the first month’s rent is usually given upfront. The tenant is also expected to pay a deposit to be allocated for possible damages. If renting seasonally, some landlords may ask for 5 or 6 months’ rent upfront, eliminating the need to collect every month.
Turkish law states that all rent (or at least those exceeding 500 liras) should be paid via bank transfer to ensure a paper trail.
Your tenant may also ask for you to provide them with a receipt for tax purposes, which is usually the case when a company is paying for a worker’s accommodation. To be able to produce a receipt, you’ll have to establish your own company. With a trusted account, you’ll be able to finalize this in no time and at a small price.
When it comes to short-term rentals, you need to be aware of the latest amendment made to the “Identity Declaration Law.” Inscribed into law in 2016, the amendment states that if the property is marketed as a holiday rental, the landlord must register the names of its tenants in the government’s GIYKIMBIL system (Geçici İkamet Yerleri Kimlik Bildirme Sistemi – Identification System for Temporary Residences).
Warning: It doesn’t matter if your tenants will be staying for even a night or two; you are legally obliged to submit their names in the system. Failure to declare occupants will result in a TL 700 fine per day. The gendarme (jandarma) will do a background check on the occupants after registration. This measure was introduced to combat terrorist activities.
How to register your tenants in GIYKIMBIL
- Visit your local gendarme station. They will give you access to the software by issuing a password for you. This is completely free of charge.
- If you have a Turkish ID or are in Turkey on a working permit, you’ll be able to sign up on the system without any issues.
- However, if you do not have these, you will need to establish your own company. (See above.)
Don’t forget: If the password is issued in your name, know that you are legally responsible for submitting these names. Hence, if you have paid an agency or property management company to handle your business, they should be the ones doing the submitting. (The management company will also be asked to produce written proof that they are managing your property as well as provide identification of both sides.)
Let’s talk tax
Regardless of the length of your tenants’ stay, and for any amount you earn that exceeds TL 5,400 annually*, you must declare all income from your rentals to the tax office.
If you have your own company, you can claim utilities such as water, electricity, and the internet as tax-deductible. For more information, please check out the Turkish tax office's English guide for foreign landlords.
Tax payments for the year are collected in 2 installments in the following year. So, for your 2020 rental income, you should be paying your tax in March and July 2021.
Although the amount of tax you pay will depend on what you earn, you should expect to pay around 15% or more. If you are a foreign national, you will need a tax ID to do this.
How can I list my property?
To get the word out, you have many ways.
The “free” way is to spread the word among friends and family members and ask them to share it with their social circles.
You should also consider joining local Facebook groups to let people know about your property and its availability. You could even create a dedicated social media page, complete with well-lit and high-quality pictures of your property and testimonials from your previous tenants.
You could also hang a “For Rent” sign on your property along with a phone number to deal with clients directly.
Listing your property online on sites such as sahibinden.com, which charges about TL 119 on average per rental advert, is also a popular choice.
You can place adverts in local newspapers, either in your region or nationwide.
You could also hire an agency or entrust your estate to a property management company that will advertise themselves, which will come at a cost.
What about Airbnb?
Despite the common misconception that Airbnb is illegal in Turkey, an idea spurred by police raids on unregistered properties, it is not – it is legal and safe, as long as you pay tax.
As a landlord, you are required to fulfill your legal obligations as a taxpayer if you earn more than TL 500 per month on your property through the platform.