Shock of Rental Tax to Millions

A warning message about rental tax debts was sent to millions of people by the Ministry of Finance. The Ministry considered all payments made with the “other” option from banks as rental income. What should those who received a message from the Ministry do? Sworn Tax Advisor Abdullah Tolu wrote for ntv.com.tr. Those who earn rental income of over 33,000 TL in 2024 must declare this income by submitting their annual income tax return between March 1st and April 2nd, 2025. The income tax accrued on these declarations can be paid in full or in two equal installments, one in March and the other in July. Everything is fine until here! A serious inspection was carried out in 2024! Specifically, within the scope of fighting against the informal economy, 1.1 million “informal audits” were conducted in the field in 2024. In these audits, fines amounting to 7.4 billion TL were imposed, and explanations were requested from taxpayers for 132.5 billion TL of informal revenue. 425,000 rental houses were inspected! Hold tight, inspections were carried out in 425,000 rental properties by the Revenue Administration Directorate in 2024, resulting in 376,000 new taxpayers who obtained rental income submitting declarations. Inspections in rental properties will also be carried out in 2025! Yes, the inspections conducted in rental properties in 2024 will continue in 2025, identifying those who do not submit an income tax return despite earning rental income and ensuring that they do so through applying various penalties. Messages informing have begun to arrive as March approaches! The Ministry of Finance, by sending informational messages to thousands of citizens who were identified as having earned rental income in 2024, warned that they must declare their rental income between March 1st and April 2nd, 2025. The received message reads as follows: “Valuable Taxpayer, According to our Directorate’s data, it has been determined that you earned taxable rental income from residential properties in 2024. Income tax returns for 2024 will be due between March 1st and April 2nd, 2025. You can quickly, easily, and securely submit your annual income tax return related to rental income through the Digital Tax Office (dijital.gib.gov.tr) or Ready Declaration System (hazirbeyan.gib.gov.tr) and pay your tax with a bank or credit card.” The warning message from the Ministry has caused panic! The rental tax message received from the Ministry has caused panic among all recipients. The reason for the panic is that a large portion of recipients who received the message did not have rental income at all! Citizens are very sensitive about this issue and have been trying to contact the Ministry, professional members, and the press feverishly since the arrival of the message to clarify that they did not have such rental incomes, find out what steps to take, and how to file an objection. Why did the Ministry send an SMS message? Based on lessons learned from the inspections and determinations made in 2024, the Ministry used the banking system to identify individuals who made transfers and EFTs exceeding the exemption threshold set for 2024, which is 33,000 TL, and who do not have a “rent payment,” “other rent payment,” or description on the receipts, issuing a warning message to them. What should a recipient of a warning message from the Ministry do? The recipient should first access the data in the message sent by the Ministry and verify its accuracy. But then, where and how should they object? How to file an objection to the Ministry’s message? First Way: If the citizen has a user code and password, they will directly log into the digital tax office using these credentials, otherwise, with an e-government password. Subsequently, under the Ready Declaration System-My Revenues and Deductions-My Rent Payments and Deductions section, for the year 2024, the payments received can be listed, and the Ministry’s determinations can be reviewed. If there is an error in this information, meaning that the payment received is not rental income, under the same menu, in the Transactions-Proposal Request-Submission and Display Proposal-Which Year you want to make an explanation for (select 2024)-Explanation regarding the Rent Payments to My Name section, the tab stating that the amount sent to my account is not a rent payment will be selected – An appropriate explanation will be written in the designated section – The Save button will be pressed, and the system will automatically send it to the tax office. Second Way: If the first way is difficult, an appeal will be made with detailed explanations through the Digital Tax Office – My Petitions – Create New Petition- General Purpose Petition selection. Alternatively, the citizen may choose to do nothing and wait for a letter from the tax office after the declaration period in March, then respond within the given deadline, providing the necessary information and documents. How to submit an objection letter to the Ministry? Thousands of citizens receiving warning messages are expected to submit an objection letter to the Ministry. If the action is related to rental income or another commercial activity, taxpayers must submit a declaration by the methods described by the Ministry through the Revenue Administration Directorate website, or, if internet access is not available, they must visit tax offices to provide income statements. These objections and declarations must be made between March 1st and April 2nd, 2025. Don’t lose your exemption right! Let’s make it clear; if rental income from properties is not declared or is underdeclared within the specified period, the exemption of 33,000 TL determined for 2024 will not be applicable. However, before any determinations are made, those who did not declare or whose property rental income was missing from the declaration that was submitted on time can benefit from this exemption by declaring their rental income with a belated declaration.