Turkey's Revenue Administration has announced the publication of General Communiqué 7194 of 15 January 2021 in the Official Gazette, which clarifies the application of the valuable housing (residence) tax introduced by Law No. 7194/2019, including several examples. The tax was originally to apply from 1 April 2020 but was delayed to 1 January 2021.

The General Communiqué confirms, among other things, the applicable progressive tax rates based on the value of residential property situated in Turkey exceeding TRY 5 million:

• over TRY 5 million to 7.5 million - 0.3%
• over TRY 7.5 million to 10 million - 0.6%
• over TRY 10 million - 1.0%

Where the value of a property exceeds the TRY 5 million threshold in a year, the tax obligation stars from the beginning of the following year. If the value falls below the threshold, the relevant tax office must be notified, together with certifying documents, and no declaration for the relevant year will be due.

The General Communiqué also clarifies the different exemptions from the tax, including the general exemptions for residential property owned by general and special budgeted administrations, municipalities, and universities, as well as residential property owned by foreign states for diplomatic missions (subject to reciprocity), and new residences owned by construction businesses. For individuals, an exemption is provided if only one residence is owned, and if multiple residences are owned, the lowest value residence is excluded.