Selling a house you built in Turkey: when does the 5-year rule start?

If you bought a plot in Turkey and built a house on it yourself, the five-year period for capital gains tax does not start on the day you bought the land. It starts on the day the building was registered on the title deed, when the property type was changed. If the land came to you by inheritance or as a gift, the picture is entirely different: whenever you sell the house you built on it, this tax does not arise.

I hear this question in messages and in the field: "The land has been mine for ten years, the house was finished two years ago. If I sell now, is there tax?" The owner naturally thinks of the day the title deed was first issued. The tax office looks at another date. The gap can be several years, and sometimes waiting a few months before selling removes the whole tax.

Why the five years do not start from the land's date

The rule is in repeated Article 80 of the Turkish Income Tax Law. Except for acquisitions without consideration such as inheritance and gifts, if real estate is sold within five years of its acquisition date, the gain is taxed as a capital gain. Under Article 705 of the Turkish Civil Code, ownership of real estate is acquired by registration on the title deed.

Here is the catch: once you build on it, the property is no longer the same entry in the land registry. When the building is registered, its type changes from "plot" (arsa) to something like "masonry house" or "reinforced concrete building". The Revenue Administration (GİB) reads this as a new acquisition. Its brochure says:

So, in the eyes of the tax office, you are not selling a ten-year-old plot but a two-year-old house. The clock restarts on the day the building is registered.

Four situations, four different start dates

How the land came to you and who built the house decide when the clock starts. A table compiled from the examples in GİB's brochure and guide:

GİB's flat-for-land example is instructive. Land bought on 23 May 2016 is given to a contractor on 11 March 2021. The flats are registered on 6 July 2023. The five years start neither in 2016 nor in 2021, but on 6 July 2023. Although the owner has held the parcel for seven years, if the flat is sold before 6 July 2028 the gain must be calculated.

The third row is the case most often overlooked. In GİB's guide, an inherited two-storey timber house is demolished and the owner receives one flat in the new building. The owner sells the flat in the same year and no capital gain arises. The reason: when inherited property is given for flats after a change of type, its character as an acquisition without consideration does not change. The brochure states the same rule for an owner who builds a house on inherited land with their own money.

There is a limit. If you buy land, build and sell continuously and in an organised way, the income can be taxed as commercial profit rather than a capital gain. A house built to live in or to sell once does not fall into that category.

Occupancy permit, utilities, actual use: what counts?

GİB recognises an exception for homes handed over for use before title registration. People who receive a ready-to-use home from a cooperative, from TOKİ (the state housing agency) or from another person, and who prove actual use with an allocation document, handover record or water, electricity and gas bills, can take the date of actual use as the acquisition date. In the guide's TOKİ example the title is issued on 2 January 2022, but the occupancy permit date of 25 November 2021 is accepted as the start.

A house you built yourself is a slightly different case. The exception is written for people who "receive" a home from someone else. If you moved in and opened utility accounts before the change of type was registered, I could not find a clear example in GİB's guides and brochures on whether that date is accepted. In my view, do not leave this date to your own interpretation.

For houses without an occupancy permit (iskan) the uncertainty is greater. Without the permit, the change of type has often not been made either, and the title deed still says "plot". There is no official example for which date the five years run from in that case. I covered the other problems such homes create in a sale in my article on buying property without an occupancy permit.

In both cases the step is the same: before selling, request an advance tax ruling (özelge) from the Revenue Administration under Article 413 of the Tax Procedure Law. It is the administration's written opinion on your specific situation. If you act in line with it, you hold a solid document in any later dispute.

Same plot, three different sales

The dates are illustrative, the rule is GİB's. The plot was bought on 15 March 2016. The house built on it was completed and the change of type was registered on 10 June 2023.

Notice that the plot's 2016 date helps in none of the rows. And the seller in the first row should not assume tax is due straight away. The first step is to see how large the gain actually is.

If tax arises, how is the cost calculated?

Repeated Article 81 defines the gain as the sale price minus the indexed cost, the expenses borne by the seller because of the sale, and the taxes and fees paid. For a house you built, cost has two parts: the purchase price of the plot and your documented construction spending, such as the contractor's invoice and invoices for materials.

• Indexation. The cost is updated by the domestic producer price index (Yİ-ÜFE), excluding the month of sale. If the increase is below 10 percent, no indexation is allowed. When construction spending is spread over several years, which item is indexed from which month is a technical matter; settle it with your accountant.
• Without documents. According to GİB's brochure, if the cost cannot be determined, the value set by an assessment commission under the Tax Procedure Law is used instead. That is why undocumented work is hard to count as cost.
• 2026 exemption. The first 150,000 TL of the calculated gain is exempt. If the gain does not exceed this amount, no return is filed. The excess is taxed under the income tax brackets.

I worked through indexation, the exemption and the brackets with numbers in my article on capital gains tax on property in Turkey. The same calculation applies to a house you built yourself. The only difference is that the start date and the cost are determined as explained here.

Where can you see the date on the title deed?

Through the Land Registry (Tapu ve Kadastro) services on e-Devlet you can see the current type of your property. Does it say "plot" or "masonry house"? That is the first place to check. To see exactly when the change of type was made, the safest option is to ask the land registry office for the title record showing the transaction history. Use the date on that record when counting the five years. The day construction finished or the day you moved in may be a different date.

Four checks before you sell

1. Find out the property type and the date of the change of type. The count starts from this date.
2. Clarify how the land came to you. Purchase, or inheritance and gift? With inheritance and gifts no capital gain arises at all.
3. Keep all documents in one file. The plot's purchase record, construction invoices, and the fee and commission receipts from the sale.
4. If the date is unclear, request a ruling. For a house without an occupancy permit or one you lived in before the change of type, act on the administration's written opinion, not on a guess.

In short: if you bought a plot and built a house on it, count the five years from the day the building was registered. If the land was inherited or gifted, this tax does not concern you. For the cases in between, where documents are missing, a written ruling before the sale is the cheapest insurance. If you want to go through the timing, the price or the process together, write to me. If you would like professional guidance, feel free to get in touch.