Rental Income Tax 2025: Who Needs to Pay? Updated Tax Rates and Calculation Guide

For property owners, rental income tax remains a significant financial obligation in 2025. Individuals earning rental income should be aware of who is required to pay taxes, exemption limits, and updated tax rates. In this guide, you will find all the latest information and calculation methods for rental income tax in 2025.

1. What Is Rental Income Tax?

Rental income tax is the income tax that property owners are required to pay on the rental income they earn. According to Turkey’s Income Tax Law, individuals who earn rental income above a certain threshold are obligated to pay income tax.

📌 Who is required to pay rental income tax?

✅ All property owners renting out residential or commercial properties in Turkey.

✅ Individuals earning rental income above the exemption limit.

✅ Those who fail to declare or underreport rental income are subject to tax penalties.

2. 2025 Rental Income Tax Exemption Limit

According to the Income Tax Law, rental income below a certain exemption threshold is not taxable. The updated exemption limits for residential and commercial rental income in 2025 are as follows:

🏠 Residential Rental Income Exemption: For 2025, rental income exceeding 47,000 TL (estimated value) will be subject to taxation.

🏢 Commercial Rental Income Exemption: No exemption applies to commercial properties where withholding tax is deducted; the entire income is taxable.

📌 Important Note: If your annual rental income is below 47,000 TL, you are not required to pay income tax.

3. 2025 Rental Income Tax Rates

If your rental income exceeds a certain threshold, you must pay income tax according to progressive tax brackets. The expected tax brackets for 2025 are as follows:

💰 2025 Tax Brackets:

Up to 158,000 TL	15%
158,000 of 330,000 TL fix 23.700 TL tax, remaining amount	20%
330,000 TL of 800,000 TL fix 58.100 TL remaining amount	27%
800,000 TL of 4,300,000 TL fix 85.000 TL remaining amount	35%
4,300,000 TL fix tax payment 1,410,000. Above amount	40%

📌 Example Rental Income Tax Calculation:

• If an individual’s annual rental income is 250,000 TL:

• After deducting the 47,000 TL exemption, the taxable amount is 203,000 TL.

• The first 158,000 TL is taxed at 15% → 15,000 TL

• The remaining 45,000 TL is taxed at 20% → 9,000 TL

• Total tax payable: 32,700 TL

4. How to Declare Rental Income?

To pay rental income tax, the declaration must be completed accurately. The declaration process can be done through the Revenue Administration (GİB) digital system.

📌 Rental income declaration process:

✅ The declaration must be submitted between March 1 - March 31, 2025.

✅ It can be filed through the Ready Declaration System or via tax offices.

✅ Payments can be made in two installments.

5. Ways to Reduce Rental Income Tax

While paying rental income tax, you can reduce your tax burden by deducting certain expenses. Here are the valid expense deduction methods for 2025:

🏠 Lump-Sum Expense Method: Allows a 15% reduction of rental income without requiring documentation.

📜 Actual Expense Method: Deductible expenses include mortgage interest, insurance, maintenance, and repair costs.

6. What Happens If Rental Tax Is Not Paid?

Individuals who fail to fulfill their tax obligations face serious penalties:

❌ Failure to submit a declaration: Constitutes tax evasion, and penalties with late payment interest will be applied.

❌ Underreporting rental income: May result in a tax audit and a penalty of up to three times the underreported amount.

📌 Recommendation: Avoid penalties by declaring rental income accurately and completely.

7. Who Is Exempt from Rental Income Tax?

In 2025, certain individuals are eligible for rental income tax exemptions:

✅ Those earning less than 47,000 TL annually in residential rental income.

✅ Properties rented out to student dormitories and foundations.

✅ Retirees receiving pensions from the Social Security Institution (SGK) under specific conditions.

Conclusion: How to Pay Rental Income Tax in 2025?

✅ Anyone earning rental income is required to pay income tax.

✅ A declaration is mandatory for rental income exceeding 47,000 TL.

✅ Tax rates range between 15% and 40% depending on income brackets.

✅ The declaration period is from March 1 to March 31, 2025.

✅ To avoid tax penalties, ensure full and accurate reporting.

📌 For updated rental income tax information and tax calculation tools, follow the Tuna Project Blog! 🚀