Recent Development
The Council of Ministry’s Decision No. 2018/11674 (“Council of Ministry’s Decision”) changing the title fee and certain tax rates was published in the Official Gazette dated May 5, 2018 and numbered 30412.
What Does the Council of Ministry’s Decision Say?
According to the Council of Ministry’s Decision, the title fee separately paid by buyers and sellers was decreased from 20/ 1000 (2%) of the applicable real property tax to 15/1000 (1.5%), provided the title fee does not fall below the acquisition and transfer value of the real property. The title fee decrease is applicable to certain residence and workplace transactions conducted before the Land Registry:
• Acquisition or transfer of a real property in return for consideration;
• Acquisition or transfer of a real property based on a contract for lifelong support or barter agreement; and
• Transfer of a real property not registered with the Land Registry through a transfer of possession agreement.
The value added tax applied to real property sales decreased from 18% to 8%; however, this is only applicable to residence and workplace sales.
The title fee and value added tax rate decreases are applicable until October 31, 2018. After this date, the prior rates will be applicable unless otherwise stated.
Conclusion
The changes to the title fee and value added tax are expected to boost the real estate market.
