Valuable Property Tax

SUBJECT OF VALUABLE PROPERTY TAX

In articles 42 to 49 added to Property Tax Law Nr. 1319; “valuable property tax” is regulated as a new type of tax.

In accordance with such regulation, the immovable assets classified as dwelling located within the borders of Republic of Turkey, the building tax amount or the value determined by General Directorate of Land Register and Cadaster of which is equal to and higher than 5,000,000 Turkish Liras, shall be subject to valuable property tax. In other words, any immovable asset that are not classified as dwelling and/or the building tax amount or the value determined by General Directorate of Land Register and Cadaster of which is lower than TRY-5,000,000.00 are out of the scope of “Valuable Property Tax”.

Basis of the tax shall be the higher of the building tax amount or the value determined by General Directorate of Land Register and Cadaster.

With regard to valuable property tax; if value of the immovable asset classified as dwelling is;

  • Between TRY-5,000,000 and TRY-7,500,000 they shall be taxed at the rate of (3 PER THOUSAND)
  • Between TRY-7,500,001 and TRY-10,000,000 they shall be taxed at the rate of (6 PER THOUSAND)
  • Equal to or higher than TRY-10,000,000 they shall be taxed at the rate of (10 PER THOUSAND).

For the immovable assets classified as dwelling subject to joint ownership; total value of the immovable asset shall be taken as basis for valuable property tax. Each owner/joint holder shall be liable for valuable property tax proportionally to his/her share. As in the immovable assets classified as dwelling subject to joint ownership; total value of the immovable asset shall be taken as basis for valuable property tax for the immovable assets subject to cooperative ownership. However, while each owner shall be liable for valuable property tax proportionally to his/her share in joint ownership; all owners shall severally be liable for valuable property tax for the immovable assets subject to cooperative ownership.

STATEMENT, PAYMENT TERM AND PAYMENT PLACE OF VALUABLE PROPERTY TAX,

The tax statement shall be submitted to the competent tax office affiliated to Revenue Administration, where the immovable asset classified as dwelling is located until the end of shift in the 20th day of February of subsequent year. The tax shall be assessed and accrued by the competent tax office annually. The taxpayer shall submit statement for successive years with same procedure, and the tax shall be assessed and accrued by the competent tax office accordingly. The tax that is assessed and accrued by the competent tax office shall be paid in two equal installments until the end of February and August of related year.

OBJECTION PERIOD FOR DETERMINED VALUE OF THE PROPERTY

The value of the property is determined by General Directorate of Land Register and Cadaster according to valuation performed by the same. Such value is announced in the website in a manner related persons may access, and a notice is sent to related person as well.

  • If no objection is raised to the General Directorate until the end of fifteenth day following the serving date of such notice, the value determined for immovable assets classified as dwelling by the General Directorate shall be final. However, it is worth to highlight the fact that right to apply tax courts against the finalized administrative transaction (against the accrual to be made in February) within 30 days is reserved.
  • The objection should be raised to General Directorate of Land Register and Cadaster or provincial organization within 15 days following the serving date of such notice to the related person. General Directorate of Land Register and Cadaster shall assess and finalize the objection within 15 days, and then announce and send notice of the finalized value accordingly.
  • If General Directorate of Land Register and Cadaster doesn’t find the objection appropriate, it shall reject the objection or determine a new value. The value stated in the decision taken according to objection shall be deemed as the “finalized value”; therefore, if there will be any amendment in the objected value, the new value shall not be open for objection again.
  • At the end of 15-day objection period, if there is no objection to General Directorate of Land Register and Cadaster or there is no reply to the objection (this shall be deemed as tacit rejection), a lawsuit may be filed by the taxpayer at the affiliated tax court within 30 days.

WHO ARE EXEMPTED FROM VALUABLE PROPERTY TAX?

Following shall be exempted from valuable property tax:

  • Public Institutions.

  • The persons who own one single immovable asset classified as dwelling

  • Embassy and Consulate Buildings

  • International Organizations and their Representatives

  • Newly constructed immovable assets classified as dwelling that belong to persons whose main activity field is construction of buildings.

In conclusion, although the governments have a wide margin of appreciation with regard to imposing new taxes and/or increasing rates of current taxes, especially in economic crisis periods, and wealth tax is categorically a legitimate tax type, it is believed that valuable property tax is not constructed in a manner not to violate property right. If such decision is not resorted to Constitutional Court through action of cancellation or objection, or if it is resorted but such provisions are not cancelled by Constitutional Court, it is expected for valuable property tax practice to be subject to individual applications with assertion of violation ownership right.

                       

  Atty. Abide Birsen

 App. Atty. Tuğçe Akıl

Yazar : GülelHukuk

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