Turkey Rental Income Guide 2026

Overview — Gayrimenkul Sermaye Iradı (GMSİ)

Rental income (gayrimenkul sermaye iradı) includes income derived from leasing real estate (land, buildings, apartments, commercial properties) and certain movable assets. Under the Turkish Income Tax Law (Gelir Vergisi Kanunu), rental income is classified as a separate income category and is subject to progressive IIT rates. Taxpayers must declare rental income in their annual return if the gross annual rent exceeds the exemption threshold. The tax treatment differs between residential and commercial (business) rentals, and between resident and non-resident landlords.

Residential Rental Income — Annual Exemption (TRY 21,000 for 2025)

For residential properties (mesken kira geliri), an annual exemption threshold applies. For the 2025 tax year, the exemption is TRY 21,000. This threshold is indexed annually by the revaluation rate (yeniden değerleme oranı). For 2026, the exemption is estimated at approximately TRY 28,000–30,000 (based on the 2025 revaluation rate of ~43.93%). If the total gross rental income received during the year does not exceed the exemption threshold, no tax return is required and no tax is due.

Important conditions:

• The exemption applies only to residential properties. Rent from commercial properties is fully taxable from the first lira
• If the gross rental income exceeds the exemption threshold, the entire amount (not just the excess) is included in the IIT return. The exemption is lost entirely
• Taxpayers who own multiple residential properties must aggregate all rental income. If the total exceeds the threshold, all rental income from all properties must be declared
• The exemption does not apply to withholding-taxed business rents (see below)

15% Lump-Sum Expense Deduction vs. Actual Costs

Taxpayers may choose between two methods for deducting expenses related to rental income. The choice must be made for each property and cannot be changed for that property in subsequent years (except as noted).

1. Lump-sum expense deduction (Götürü Gider Usulü): 15% of the gross rental income may be deducted as a blanket expense without any supporting documentation. This is the simpler option and is generally preferred by small landlords with minimal expenses. The 15% covers all costs associated with the property (maintenance, repairs, insurance, management fees, depreciation, etc.). No further expenses may be claimed. If the taxpayer elects this method, they must apply it to all rental income from all properties — it cannot be mixed with actual costs for different properties.

2. Actual cost deduction (Gerçek Gider Usulü): The taxpayer deducts the actual, verifiable expenses incurred during the year. Qualifying expenses include:

• Repairs, maintenance, and renovation costs
• Insurance premiums (property insurance, rental guarantee insurance)
• Property management fees and commissions paid to real estate agents
• Interest on loans used to acquire or improve the property
• Municipal taxes (emlak vergisi) and other property taxes
• Depreciation (amortisman) — 2% of the property's cost per year (50-year useful life for buildings)
• Utilities (water, electricity, gas) if paid by the landlord
• Legal and notary fees related to the lease
• Court costs for eviction proceedings if applicable

If total actual expenses exceed the gross rental income, the excess may be carried forward to future years (but not refunded). The actual cost method is more favourable when expenses are high (e.g., newly purchased property with mortgage interest, or a property requiring significant repairs).

Business Rents — 20% Withholding (Stopaj)

When a tenant is a business (including sole proprietors, corporations, government agencies, and professional offices), the tenant is required to withhold 20% income tax (stopaj) from the gross rent and remit it to the tax office. The landlord receives the net rent (gross rent minus 20%). Key points:

• Withholding obligation: The tenant (business) withholds 20% of the gross rent and pays it to the tax office through the Muhtasar Beyanname (withholding return) by the 24th of the following month. The tenant provides the landlord with a withholding certificate (stopaj makbuzu) documenting the tax paid
• Landlord's treatment: The gross rent (before withholding) must be declared as rental income. The 20% withholding is credited against the landlord's annual IIT liability. If the withholding exceeds the tax due, the excess is refunded
• Residential exemption not available: Rents subject to withholding (business rents) are not eligible for the residential exemption threshold. The full gross rent must be declared
• Expense deduction: The landlord may still choose between the 15% lump-sum deduction and actual costs for business rental properties
• KDV (VAT) on commercial rents: Commercial property rents are subject to KDV at 20% (increased from 18% in 2023, rate confirmed for 2026). Residential rents are exempt from KDV. The tenant (if VAT-registered) may deduct the KDV as input VAT

Rental Income and IIT Brackets (2026)

Rental income is included in the annual IIT return and taxed at the progressive brackets:

• Up to TRY 300,000: 15%
• TRY 300,001–TRY 700,000: 20% (minus TRY 15,000)
• TRY 700,001–TRY 1,700,000: 27% (minus TRY 64,000)
• TRY 1,700,001–TRY 3,000,000: 35% (minus TRY 200,000)
• Above TRY 3,000,000: 40% (minus TRY 350,000)

These brackets apply to the taxpayer's aggregate taxable income (including salary, business income, and other categories). Rental income is added to other income for bracket determination. Tax already withheld (e.g., 20% on business rents, 15% on salary stopaj) is credited against the final tax liability.

Filing and Payment — Rental Income

When to file: If gross annual rental income (residential) exceeds the exemption threshold, or if you have any business rental income, you must file by 31 March of the following year via the Hazır Beyan Sistemi (simplified online filing for individuals) or through a CPA.

What to file: The Yıllık Gelir Vergisi Beyannamesi (annual IIT return). Rental income is reported under the section for "gayrimenkul sermaye iradı." Include the gross rent, the elected expense deduction (15% lump sum or itemised actual costs), and the net taxable rental income. If the tenant withheld tax, include the withholding amount as a tax credit.

Payment: Tax is paid in three instalments (2026): first by 31 March, second by 31 July, third by 30 November. Each instalment is one-third of the total tax due.

Pre-filled forms: The Hazır Beyan system pre-populates rental income data from lease agreements registered in the e-Devlet system, if applicable. However, it is the taxpayer's responsibility to verify all data.

Special Situations

Rental income from abroad: Turkish residents renting out foreign real estate must declare the gross rental income (converted to TRY at the TCMB exchange rate on the receipt date) in their annual return. Foreign property taxes may be credited under double tax treaties or the unilateral foreign tax credit rules. The residential exemption threshold does not apply to foreign rental income.

Non-resident landlords: Non-residents renting out Turkish property must obtain a Tax Identification Number and file an annual return. The 20% withholding by the tenant (if the tenant is a business) is the primary tax mechanism. If the tenant is an individual (residential), the non-resident landlord must file a return and pay tax directly. The exemption threshold does not apply to non-residents unless they are resident in Turkey for tax purposes.

Sub-letting: Income from sub-letting a rented property is also classified as GMSİ and must be declared. The original rent paid by the sub-lessor may be deducted as an actual expense (if the actual cost method is chosen).

Property used partly for business: If a taxpayer uses part of their residence for business (e.g., home office), a proportionate amount of rental income (or imputed rent) may be taxable. Consult a CPA for the correct apportionment.

FAQs

Is the TRY 21,000 exemption per property or per taxpayer?

Per taxpayer (landlord). If you own multiple residential properties, you must aggregate the total rental income. If the total exceeds the threshold, all rental income from all properties must be declared. The exemption does not apply to commercial rents.

Can I switch between lump-sum and actual expense methods?

The election is made per property in the first year the property is rented. Once you choose the lump-sum method for a property, you cannot switch to actual costs for that property in later years. However, if you choose actual costs, you may switch to the lump-sum method in a later year. The election applies per property, so you could use different methods for different properties.

What happens if my tenant doesn't withhold tax?

If the tenant is a business required to withhold 20%, but fails to do so, the landlord is still liable for the full tax. The landlord should report the gross rent and claim no withholding credit. The tax office may pursue the tenant for the withholding obligation separately. Residential tenants (individuals) have no withholding obligation — the landlord is responsible for filing and paying.

Are rental deposits and guarantees taxable?

No, rental deposits (depozito) held as security for damages are not income. However, if the landlord forfeits the deposit for any reason other than actual damages, the forfeited amount may be taxable as rental income. Advance rent payments (e.g., one year's rent paid upfront) are taxable in the year of receipt.

Do I need to register the lease agreement with the government?

Lease agreements can be registered in the e-Devlet system (e-DoS) for official record-keeping. While not mandatory for all leases, registration is recommended as it serves as proof for the tax office. Business lease agreements (with withholding) are typically recorded through the tenant's accounting system. The tax office may cross-reference rental declarations with utility records, lease registrations, and neighbourhood surveys.

Disclaimer

This guide provides general information about Turkish rental income taxation for the 2026 tax year. Exemption thresholds are based on the most recent published data and are indexed annually. Always consult with a qualified Turkish tax advisor (Yeminli Mali Müşavir) or GİB for advice specific to your situation. InvestmentKit does not provide tax advice.