Introduction
With the law numbered 6360 dated 12 November 2012, the status of the villages within the metropolitan borders was transformed into neighborhoods. This regulation, affecting more than 16.000 villages and 1053 towns in Turkey, entered into force after the 30 March 2014 local elections and the common ownership and pastures of the village legal entity were transferred to the municipality to which they are affiliated. With “Law No. 7254 on Public Financial Management and Control and the Law on Amendments to Certain Laws”, published in the Official Gazette on October 16, 2020, villages and towns have been granted the right to "rural neighborhoods” , provided that they meet certain conditions and make an application.
I. Application Procedure for Rural Neighborhood Status
As stated in the regulation, in order for the neighborhood to gain the status of a rural neighborhood, it must first apply to the county municipality to which it is affiliated. Upon the decision and proposal of the county municipal council, the neighborhoods that are determined to be rural settlements with the decision to be taken by the metropolitan municipality council within 90 days at the latest will be accepted as "rural neighborhoods". Whether the neighborhood is located within the boundaries of the metropolitan municipality, its distance from the city center, the current settlement status, and similar issues are taken into consideration in the application.
It is essential that the determination of the "Rural Neighborhood" status is made at the neighborhood level. However; other neighborhoods, not all of which are defined as rural neighborhoods, can also be identified as “Rural Built-up Area” provided that they are not less than 10.000 square meters. The "Rural Neighborhood" or "Rural Built-up Area" qualification can be removed by the procedure described above. The metropolitan municipality council may accept or reject the proposal from the county municipality regarding the transformation into a rural neighborhood exactly or with amendments.
II. Advantages of Rural Neighborhood Status
In the regulation brought by the 10th article of the Law, it is regulated that the buildings, lands and plots used as workplaces personally by taxpayers who are exempt from income tax and taxpayers who are subject to income tax in a small business taxation will be exempt from real estate tax. In addition buildings used for residential purposes and buildings, lands and plots used in agricultural production will be exempt from real estate tax. In these places, real estate tax will be applied with a fifty percent discount for buildings, lands and plots used in commercial, industrial and touristic activities.
In accordance with the law, exemption will be applied to the payment of building and construction taxes and reconstruction mortars in rural neighborhoods, and a fifty percent discount will be applied to other taxes, fees and expenses. Besides, the fees to be charged for drinking and utility water will be determined on the basis of the lowest tariff, not exceeding twenty five percent of the lowest wage in residences and fifty percent in workplaces. Lastly, it is crucial to state that taxpayers who keep books on the basis of balance sheet cannot benefit from the exemptions and discounts regulated in the Law No. 7254.
Conclusion
The disadvantages caused by the transfer of the assets of the villages and towns, which were converted into neighborhoods in 2012, to the municipalities they are connected to, are trying to be eliminated with the "rural neighborhood" regulation. However, there are unclarities regarding the implementation of the changes brought by Law No 7254. To exemplify, there is no regulation in the Law about the goods transferred to the metropolitan municipality and sold by the metropolitan municipality while the village belongs to the legal entity. Hence, the implementation principles of the Law are expected to be concretisation in a regulation or circular to be issued by the administration.
Yazar : Att. Yusuf Eren Yildiz - Legal Intern Ece Melis Unlusan