Inspectors after tax regularities on southern coast
The Finance Ministry has stepped up efforts to uncover tax irregularities on Turkey's southern coasts after discovering that thousands of summer homes owned by foreigners are used for commercial purposes without the legal declarations required.
Tax inspectors are trying to ascertain if foreign owners put their summer homes up for rent as pensions for tourists visiting the area. The investigation includes Turkish property owners as well. Local tax departments distributed brochures last summer to inform property owners about tax requirements; this year, tax inspectors are focusing their work on discovering irregularities.
Earlier this month, chiefs of local taxation departments in Antalya, Aydin, Izmir and Mugla - areas with the highest foreign property purchases -- met in Izmir to discuss steps for coordinating inspections in the region. Until now, such inspections have been carried out by provincial tax departments and there was no regional coordination among them. "To date provincial tax departments have conducted inquiries about property owners renting their summer houses on their own. This year, we decided to combine forces for a joint effort," said Mehmet Kilci, a senior official at the state Revenue Department. Antalya's Kas and Alanya, Aydin's Didim and Kusadasi, Mugla's Bodrum, Milas and Güllük cities and Izmir's Çesme district are favorites with foreigners seeking to buy property for summer homes. Foreign property owners then post Internet ads or employ other methods to rent their houses as pensions for visitors from home.
But one particular difficulty in determining tax irregularities stems from determining whether the person staying in someone else's summer house is a renter or a guest. To clarify the situation, authorities examine telephone and electricity bills to ascertain whether the houses in question are regularly occupied. Antalya Tax and Revenue Office Director Mahmut Sütçü said informative brochures distributed last summer were helpful, as several foreign property owners have applied to the tax department to declare their rental income and pay taxes on it. The brochures also included a questionnaire for residents of summer houses inquiring whether they own the house in which they are staying or whether they put their house up for rent. "We found out that foreign property owners rent their summer houses to other foreigners, mostly from their home countries, for short periods of five to 15 days. Some 55 foreign property owners came to us to declare their rental income and pay taxes," Sütçü said, adding that authorities expected more property owners to begin paying taxes for the property they rent out this year.
Turkish citizens renting their summer houses are also encouraged to declare their rental income and pay taxes, he said. As for Mugla, Serdar Aksoy, the head of the provincial Tax and Revenue Department, said it was difficult to determine whether the house is rented because most of the renters come as home guests. Aksoy said authorities in Mugla had worked together with construction companies, real estate agencies and contractors to collect information on issues of property sale and rental and that the collected data was assessed at the meeting in Izmir. Yilmaz Çakan, a senior official for the Izmir Tax and Revenue Department, said his department was using the Internet to discover summer houses for rent and added that the search had already borne fruit. Tax authorities in the Aegean province are also working with the Land Registry to determine the number of summer homes in Izmir, most notably in the Çesme district.
