Individuals who earn more than 33,000 TL in rental income in 2024 are required to submit an income tax return starting from March 1. The 2025 rental income tax guide provides answers to all your questions.

One of the most anticipated topics among the incomes earned in 2024 is the method of submitting a declaration regarding rental income. Individuals who earn rental income from March 1 to the end of April are required to submit the declaration either online or by directly visiting tax offices. Declarations will be made for rental incomes earned in 2024.

Those who fail to submit the declaration within the allocated time period will not benefit from the 33,000 TL deduction from the total annual rental income, and may face additional penalties.

The rental income declaration guide includes answers to all your questions. Let’s take a closer look at declaring income from residential rental:

FOR WHICH PROPERTIES IS A DECLARATION REQUIRED?

Individuals earning income from land, buildings (including rental fees taken for furnished rentals), will be required to submit a declaration. Income from rental properties is based on the cash basis of collection. Accordingly, rental income must be collected in cash or in kind for taxation on a cash basis.

DOES TAX NEED TO BE PAID FOR UNCOLLECTED RENTAL INCOME?

No tax is payable for uncollected rent. The cash collection of the rent indicates payment either in Turkish lira or foreign currency. Cheque payments are also considered as cash receipts. Rental fees received by taxpayers in the current or previous years are considered as the year’s revenue in which they were collected.

HOW IS TAX PAID FOR ADVANCE RENTAL PAYMENTS?

Advance rental payments collected for future years will be considered income from the year the income is related to, not the year the payment is made. For example, if rental incomes for the years 2022, 2023, and 2024 are collected in bulk in 2024, these incomes will be considered as income for the year 2024. If advance rent is collected in 2024, this income will be declared as income for the year 2024.

HOW WILL TAX BE CALCULATED FOR LEASES IN FOREIGN CURRENCY?

Gross revenue from rentals in foreign currency will be determined based on the TC Central Bank exchange rate at the time of collection.

Landlords and tenants who lease residential and commercial properties must declare their rental transactions using documents issued by banks or by the official Postal Service company. Payments related to short-term residential leases, such as weekly or daily rentals, will also be included in the documentation.

DO I NEED TO PAY TAXES FOR RENTS COLLECTED THROUGH EXECUTIONS?

Rental payments made through court orders or executions for leased properties are not subject to the obligation of providing documentary evidence.

HOW DO I PROVIDE PROOF OF RENTAL INCOME?

Documents such as bank receipts and account statements issued through banks or the official Postal Service company, including payments made through methods like deposits, wire transfers, EFT, cheques, and bank or credit cards, are considered as proof of income. Payments and collections made through online banking services are also included in this category.

WHAT IS THE PENALTY FOR NOT DECLARING RENTAL INCOME?

Failure to comply with evidence requirements for rental payments will result in a penalty of 10% (5% before 2/8/2024) of the amount for each transaction as specified in the supplementary Article 355 of the Tax Procedure Law. Taxpayers who make payments in violation of banking regulations need to inform the authority within five business days. Otherwise, a penalty will not be imposed on the taxpayer who made the payment.

I ALLOWED MY HOME TO BE USED RENT-FREE, SHOULD I PAY TAXES?

Yes. In cases where the rental fee is nonexistent or low, the “reference rental fee” will be applied. If residential properties are left for others to use rent-free or the rental fee is lower than the reference rental fee, the reference rental fee principle will be applied. The reference rental fee for leased buildings and land is the rental price determined by competent authorities or courts. For instance, if a taxpayer has allowed a friend to use an apartment with a property tax value of 5,200,000 TL rent-free in 2024, the taxpayer must calculate annual rental income based on the reference rental fee. The reference rental fee would be 5% of 5,200,000 TL, which is 260,000 TL. This amount will be considered as income to be declared by the taxpayer.

TO WHOM CAN I RENT MY PROPERTY RENT-FREE?

It is possible to state that no rental income is earned for certain properties and avoid paying taxes. These include leaving vacant real estate for conservation purposes free of charge for others to reside in, allocating buildings to the use of property owners’ family members (parents, grandparents), descendants (children, grandchildren), or siblings (However, if these individuals are allocated multiple properties for residence, the reference rental fee will only be calculated for one property. For example, if the property owner allocates two properties to a child for residence, the reference rental fee will be calculated for one property and not for the other). If family members also reside in the same house or apartment with the property owner, there is no requirement for a rental agreement.

WHAT IS THE EXCEPTION FOR RENTAL INCOME TAX?

The housing exemption applies only to income derived from real estate rented as residential property. Individuals with residential rental income below 33,000 TL in 2024 will not be required to submit an annual tax return for this income. If the rental income exceeds this amount, a tax return must be submitted, and taxes paid. This exemption will be calculated as follows; if a taxpayer earned 240,000 TL in residential rental income from properties rented out in 2024, they will subtract 33,000 TL and submit an income tax return for the remaining amount. Those whose rental income exceeds 870,000 TL in 2024 will not benefit from the 33,000 TL deduction.

I DON’T HAVE RENTAL INCOME BUT RECEIVED A TAX BILL, WHAT SHOULD I DO?

In this case, you should object. There are two ways to lodge an objection. If you have a user code and password, you can log into the digital tax office with this information; otherwise, you can use your e-government password. Then, you can select the Ready Declaration System-Incomes and Deductions- Rental Payments made for Me and Deductions section, choose the year 2024, list the payments, and access the assessments made by the Finance Ministry. If there is an error in this information, meaning that the received payment is not rental income, you can go to the same menu and select My Transactions- I Want to Make an Explanation- Explanation Entry and Display – Select the Year for which you want to make an explanation (2024) – Explanation of Rental Payments Made for Me- Indicate that the Amount Sent to my Account is not Rental Payment – Add a relevant explanation – Click Save, and the system will automatically forward it to the tax office. The second method is as follows: If the first way seems challenging, you can use the Digital Tax Office – My Petitions – Create a New Petition – General Purpose Petition options to make a detailed explanation and apply through the system. Or the citizen can wait for the tax office to send a letter after the declaration period in March and then provide the necessary information and documents within the given time.

HOW TO SUBMIT AN OBJECTION PETITION TO THE FINANCE OFFICE?
If the transaction is related to rental income or another commercial activity, taxpayers must declare it to the Revenue Administration website through the methods specified by the Finance Ministry, or if electronic transactions are not possible, they need to visit the tax offices to declare income. These objections and declarations must be made between March 1 and April 2, 2025.