Due to the recent rise in rent prices, some landlords have started receiving part of the rent in cash and the rest through the bank to avoid taxes. Some are also not creating rental contracts and showing their properties as vacant. However, the tax authorities have intensified their inspections regarding this issue. Those engaging in the unregistered economy are facing fines of up to 20 million Turkish Liras.
Last year, the Ministry of Treasury and Finance introduced a law requiring rent payments for residential and commercial properties to be made through banks or the PTT (Turkish Postal Service). Recently, with the lifting of the 25% cap on rent increases and inflation-based rent hikes, opportunistic landlords have taken advantage of the situation.
Complaints have been filed to the CİMER (Public Administration Communication Center) and the Revenue Administration. It has been revealed that some landlords, seeking to avoid high taxes, either refuse to create rental contracts, report their properties as vacant, or accept part of the rent in cash and the rest through the bank.
This situation has led to conflicts between landlords and tenants. Tenants argue that these practices are illegal, but landlords persist, leading to legal cases.
Inspection and Potential Penalties
Tax authorities have deepened their investigations and are tightening inspections. They are preparing to issue fines to landlords who refuse to create contracts, report their properties as vacant, or accept part of the rent in cash while processing the remaining amount through the bank.
Authorities are planning to check title deeds and bank accounts. This could lead to significant financial penalties for both landlords and tenants, highlighting the importance for citizens to act within the legal framework.
Expert Recommendations
Experts are advising that all rent payments be documented to avoid penalties. They emphasize that, regardless of whether the landlord agrees or not, any rent payments above 500 TRY should be made through the bank or PTT.
Fines Up to 20 Million TL
Under a law passed last year, while both landlords and tenants could be fined for unregistered rent payments in commercial property rental cases, tenants were not penalized in residential property cases. However, a recent amendment to the Tax Laws includes penalties for tenants as well.Landlords or tenants who do not pay rent through the bank or PTT will face fines of 10% of the rent amount for each instance. The minimum fine is set at 5,000 TRY. However, tenants can avoid this penalty if they report the cash payment within five business days after making the payment.
Additionally, the maximum penalty for violations within a calendar year has been raised from 8.7 million TRY to 20 million TRY.
