Important Changes Coming in the Income Tax Law

There is an important change about to take place in the tax system in Turkey. A new Draft Law on the Amendment of Tax Laws and Various Laws and the Decree Law No. 631 has been submitted to the President of the Grand National Assembly of Turkey (TBMM) with the signatures of AK Party members of parliament.

This proposal foresees various changes in the Income Tax Law. At the heart of these changes are the rental incomes obtained by individuals who rent out their buildings as residences within a calendar year. It is planned to make some arrangements in the currently applied exemption. These changes will directly affect citizens who receive pensions, disability, widow, and orphan allowances from social security institutions established by law.

According to the new arrangement, the scope of the income exemption provided for rented residential properties is being redefined, and it aims to review previously made decisions on this issue. The regulation is expected to come into force on January 1, 2026. From this date, there will be significant changes in the applications regarding the rental income of the relevant parties that may be distressing.

At the same time, this regulation aims to prevent erosion experienced in rural areas. In other words, it is intended to ensure that the incomes obtained by property owners from the residences they rent out are monitored and managed more comprehensively, thus aiming for an increase in tax revenue, as well as allowing property operators to breathe a sigh of relief. In this way, both the increase in public revenues will be sought, and a sustainable structure will be aimed at, taking into account the economic conditions of households.