Finance Ministry chases 500,000 property owners

20th, 2011
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The Ministry of Finance will examine the transactions of 500,000 individuals who have sold or purchased two or more houses last year to tax them if a profit was made from the sale of those properties, a top ministry official told Today’s Zaman.
Speaking on the condition of anonymity because the plan was not yet public, the Finance Ministry official said they will send a letter to those 500,000 people who have traded at least two houses last year, urging them to pay the tax on the income derived from the transactions they made. He noted that after the letters have been sent, the ministry will examine the number of people who did not disclose their income — or profit — from the transaction of buying a house at a low price and selling it on for a higher price, and fine them. The official noted that buying and selling two or more houses in a year is perceived as doing business, which should be taxed if a profit has been earned. For instance, if someone buys a house for TL 100,000 and sells that same year for TL 120,000, the Ministry of Finance will tax the TL 20,000 depending on the tax bracket, which varies from 15 to 35 percent.
“The Ministry [of Finance] has identified the names of the people who traded two or more houses from the data they received from Turkey’s Land Registry General Directorate and the deed tax they paid. These transactions are seen as business activities and should be taxed. Therefore, we will demand the tax on the profit they made from selling these properties. The ones who persist not to disclose their profits will be charged with a fine as big as the profit they made according to our registries,” the official told Today’s Zaman.
According to speculations in Ankara circles, the Revenues Administration’s (GİB) supervision results of the past year triggered the ministry to focus on the transactions in the real estate sector. The GİB’s supervision results showed that most of the tax evasion in Turkey occurred in the construction industry and real estate market as real estate agents claimed a profit of TL 86.33 million in the last five years while the increase in value of the properties they have sold was TL 514.4 million.
Resource: Today’s Zaman

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