Thinking of making home upgrades in Turkey? Whether you’re preparing to sell or just want to increase your property’s long-term value, upgrades that go beyond basic renovation can do more than just enhance comfort—they can significantly reduce your future tax bill.
What Are Home Upgrades That Qualify?
Not all improvements are equal. Major additions like new rooms, solar panels, swimming pools, or full kitchen remodels qualify as upgrades that increase your property’s overall value and extend its lifespan. These are more than cosmetic—they’re investments.
And here’s the bonus: If you decide to sell your home within 5 years of buying it, these upgrades may help you lower the amount of capital gains tax you owe.
How Do Upgrades Reduce Your Tax Liability?
When selling a property within five years, the profit you make is subject to Capital Gains Tax (CGT). But there’s a catch—in a good way. You’re allowed to subtract the money you spent on value-adding upgrades from your taxable profit.
Let’s break it down with an example:
- Without Upgrades:
Bought at ₺2,000,000 → Sold at ₺3,000,000
Taxable profit = ₺1,000,000 - With ₺500,000 in Upgrades:
Bought at ₺2,000,000 → Invested ₺500,000 → Sold at ₺3,500,000
Taxable profit = ₺1,000,000 (because ₺3,500,000 – ₺2,500,000 = ₺1,000,000)
Even though you earned more, your tax stays the same due to deductible upgrade costs.
In the middle of planning your next project, make sure you explore Capital Improvement in Turkey to fully understand the tax benefits these upgrades can offer.
Not All Renovations Count
There’s a big difference between upgrades and regular renovations:
- Qualifying Upgrades: New roof, additional floor, central heating, swimming pool
- Non-Qualifying Renovations: Painting walls, replacing curtains or carpets
Only upgrades that enhance the value or extend the life of the property can be deducted from taxable profits. Cosmetic touch-ups, while nice, won’t save you money on taxes.
What You Need to Prove Upgrade Costs
To take advantage of these tax benefits, you’ll need proof. Follow these steps:
- Collect Official Invoices (Fatura)
Must include your name, address, and tax ID number - Use Bank Transfers or Cards
Avoid cash. Bank statements and receipts are required proof. - Work with Licensed Contractors
Only registered firms can issue valid invoices accepted by tax offices. - Get Municipal Permits for Major Work
Any structural changes require city approval (Belediye Ruhsatı) - Order a Property Valuation Report
This shows how your home’s value increased after the upgrades
All documents must be presented to the tax office when you sell your property to claim the tax deduction.
When Is the Best Time to Upgrade?
Ideally, before selling. Smart investors start upgrading in advance to increase resale value and reduce taxes at closing. Even if you don’t plan to sell now, these investments will pay off later.
How Is Capital Gains Tax Calculated in Turkey?
Turkey’s CGT is based on your profit and is only applied if you sell within five years:
- ₺0–70,000 profit → 15% tax
- ₺70,001–150,000 → 20%
- ₺150,001–370,000 → 27%
- Over ₺370,000 → 35%
No tax is owed if the property is sold after 5 years.
Ways to Reduce or Avoid CGT
- Hold the property for over 5 years
- Invest in qualifying home upgrades
- Apply for legal exemptions if your home is a primary residence
Plan Smart, Save Big
Home upgrades in Turkey are more than just lifestyle improvements. With the right documentation, they become a financial strategy that enhances resale value and lowers taxes.
Thinking of selling or upgrading soon? Start gathering your documents, choose certified professionals, and plan your project smartly—so that when the time comes to sell, you keep more of your hard-earned profit.
