After the ‘Mother-in-Law Tax’ that hit the agenda like a bombshell a short while ago, now the ‘Guest Tax’ is on the agenda…
Mother-in-Law Tax is the name that Economics Writer Abdullah Tolu gave to the income tax that a couple would pay based on the comparable rent if they were living with their mother-in-law in a house they own without receiving any rent.
Again, according to the subject that Abdullah Tolu included in his column, the guest tax is a payment for guests who reside with the owner other than their relatives: “If the person residing with the owner of the property is not related to them, the owner of the property must pay the “Guest Tax”.”
The regulation, which is valid for guests staying for at least 3 months or more, is not new, it has been in effect for a long time. Tolu, who stated that Article 73 of the Income Tax Law titled “Comparable Rent” is exactly related to this issue, said, “The rental prices of properties and rights that are rented cannot be less than the comparable rental price. The comparable rental price of houses that are left for the use of others free of charge is considered the rent of these houses. The comparable rental price in houses is calculated as 5 percent of the property tax value of the house. According to this regulation, for example, the comparable rental amount of a house left for the use of others free of charge is considered the rent of this house and taxation is carried out on the comparable rental price.”
Cases Where Comparable Rental Price Will Not Be Applied
According to Article 73 of the Income Tax Law titled “Comparable Rent”, the cases where the comparable rental price principle will not be applied can be listed as follows:
- Delivery of real estate to others free of charge due to abandonment
- Leaving the home to the residence of family members (parents, children, siblings)
- Relatives of property owners living in the same house or apartment
- Leasing transactions carried out by public institutions
Who Pays Guest Tax? How is Guest Tax Calculated?
Within the scope of this regulation, if the property owner and “family members” reside in the same residence or apartment, “Guest Tax” is not applied. However, if the person living in the residence with the property owner is “not a family member”, “Guest Tax” is collected based on the comparable rental price. This tax is paid by the property owner, not the guest. Therefore, property owners file an annual income tax return and pay income tax as if rental income was earned based on the comparable rental price.
According to Abdullah Tolu, who emphasized that the property tax value of the house and the number of people staying in the house are very important in calculating the guest tax; In 2023, homeowners who host visitors who are not relatives in their homes must act as if they earned rental income between March 1 and April 1, 2024 and file an annual income tax return and pay the resulting income tax.
Tax is not paid if the comparable rental price does not exceed 21 thousand liras
For visitors who stay in the same residence with the landlord but are not relatives, 21 thousand TL of the standard rental price determined for 2023 (33 thousand TL for 2024) is exempt from income tax. For this reason, if the standard rental price is below 21 thousand TL for 2023, an annual income tax return and tax payment are not required. If the 21 thousand lira limit is exceeded, 21 thousand liras of the calculated comparable rental price is exempt from income tax, while the excess amount will be subject to tax.
The Ministry of Finance, which has recently been more meticulous in declaring rental income, has determined that there is rental income potential in approximately 2 million residences and has started field studies to determine the real situation in these residences. Experts emphasize that in order to prevent informality in rental income, it should be mandatory for rental contracts to be made through the e-government platform and that a legal regulation is needed for this.
