Legal Consequences of Declaring a Lower Property Value on the Title Deed in Turkey Under the 2026 Legal Reforms

The penalty for declaring a lower sale price on the title deed in Turkey in 2026 consists of the underpaid title deed fee on the difference between the real and the declared price, a tax loss penalty equal to one times that fee, and delay interest; these amounts are assessed separately against the buyer and the seller in proportion to their own shares.

Declaring a lower sale price on the title deed in Turkey means having an amount below the actual transfer price written into the official deed of sale, which results in underpaid title deed fees and taxes and is sanctioned under the Fees Law No. 492 and the Tax Procedure Law No. 213. A title deed is a legal document that officially registers the ownership rights of a property, and ownership passes to the buyer through an official real estate transaction in Turkey conducted at the Land Registry Office. In practice, reporting a low sale price on the title deed in Turkey is a common approach, often aimed at reducing tax liabilities.

By selling property lower than its actual sales price in Turkey, the parties involved aim to lower the title deed fee and taxes. In Turkey, the minimum value used for the title deed fee is the property’s real estate tax value determined under the Real Estate Tax Law; even if the declared sale price is lower, the fee is charged on the real estate tax value. Because the title deed fee is calculated on the sale price declared on the title deed, underdeclaration directly reduces the fee; a seller who sells within five years may also use the low price to understate capital gains. Under Repeated Article 81 of the Income Tax Law, however, that gain is calculated not on the title deed price but on the consideration actually received. By contrast, the luxury housing tax is based on the building tax value and inheritance tax on the value used for real estate tax, so these taxes are not affected by the price on the title deed.

Property owners might opt for declaring a lower sales price for property in Turkey to reduce tax liabilities. However, this practice carries potential risks, including penalties and additional tax assessments in the future. There are penalties for underreporting property sale price on the title deed in Turkey, and the parties involved may be required to pay this penalty along with interest for any delayed payments. Since Law No. 7566 dated 4 December 2025 raised the tax loss penalty for underdeclaration from 25% to 100% (one-fold), declaring a low sale price on the title deed in Turkey may seem to offer short-term tax advantages for both the buyer and seller, but it is a practice that now comes with far heavier legal and financial risks.

What Is the Title Deed Sale Price?

The title deed sale price is the official sale value written into the deed of sale drawn up at the Land Registry Office during the transfer of property ownership in Turkey, and it forms the basis for calculating the title deed fee. This amount reflects the sale price agreed upon by the buyer and seller and must be reported to the Land Registry Office.

1. Legal Nature of the Title Deed Sale Price in Turkey

The title deed sale price not only represents a private agreement between the parties involved but also serves as a key component in the government’s regulatory mechanisms and financial obligations in the real estate market. For this reason, the declared price produces consequences under both private law and tax law in Turkey. One of the most important points to consider when buying property in Turkey is declaring the sale price on the title deed correctly.

• Official Form Requirement: Under the Turkish Civil Code and the Title Deed Regulations, property ownership can only be transferred through the creation of an official contract and registration with the Land Registry Office. Article 706 of the Turkish Civil Code and Article 237 of the Turkish Code of Obligations make the validity of a real estate sale contract in Turkey conditional on its being executed in official form.
• Basis of Financial Obligations: In this context, the title deed sale price plays an essential role in calculating title deed fees, determining property taxes, and regulating the real estate market in Turkey.
• A Declaration Open to Audit: If the sale price declared on the title deed in Turkey is incomplete or inaccurate, it may lead to tax losses, prompting the government to implement various control mechanisms and penalties.

2. How Is the Sale Price Declared to the Land Registry Office in Turkey?

The sale price of the property is declared by the property owner during the title deed application process in Turkey. This declaration is a mandatory step for officially initiating the property transfer process, and it forms the basis of the subsequent procedures carried out by the relevant Land Registry Office.

In Turkish land registry practice, the Land Registry Office prepares the official sale documents based on the sale price declared by the owner and arranges the necessary paperwork for the transaction to be completed. During this process, title deed fees and other legal financial obligations are calculated based on the declared sale price, and the amounts to be paid by the buyer and seller are communicated, allowing the transaction to proceed.

3. What Does the Transaction Value on the Title Deed Mean in Turkey?

The transaction value on the title deed in Turkey is the transfer price declared by the parties in the sale application and entered into the official deed of sale; the title deed fee is calculated on this price, provided that it is not lower than the property’s real estate tax value. Under Article 63 of the Fees Law No. 492, if the declared price falls below the real estate tax value, the fee is charged on the real estate tax value instead of the declared price. The transaction value and the value used for the fee are therefore not always the same amount.

Since the transaction value is a declaration reflecting the will of the parties, writing it differently from the real sale price does not make that figure “official”. When the tax administration in Turkey determines that the transaction value does not reflect the true situation, it can subsequently assess the fee corresponding to the difference.

4. Is the Sale Price Written on the Title Deed in Turkey and How Can It Be Found Out?

The sale price of a property in Turkey appears in the official deed of sale drawn up at the Land Registry Office, and this deed is kept in the land registry archive as an integral part of the land register. The owner can learn the sale price by requesting a certified copy of the official deed of sale from the relevant Land Registry Office.

Under Article 7 of the Land Registry Regulation (Tapu Sicili Tüzüğü), the official deed is one of the official documents forming the main registers of the land registry. Although Article 1020 of the Turkish Civil Code declares the land register open to everyone, for persons other than the owner this openness is limited: anyone who makes their interest credible may ask for the relevant page of the register and its documents to be shown to them before the registrar or for copies to be issued. For example, in Turkey a co-owner holding a right of first refusal or an heir can learn the price in the official deed in this way before filing a lawsuit.

How Is the Official Title Deed Sale Fee Determined in Turkey?

Title deed fees are calculated based on the sale price declared on the title deed in Turkey, and according to the regulations in force, the title deed fee is determined at a rate of 4% of the sale price declared on the deed. Known in practice as the title deed transfer tax, this rate is the total of the 20 per thousand (2%) fees charged separately to the transferor and the transferee under paragraph 20/a of Tariff No. 4 attached to the Fees Law No. 492.

1. Rate and Tax Base of the Title Deed Fee in Turkey

Two elements determine the calculation of the title deed fee in Turkey: the tax base and the applicable rate. The Fees Law takes the parties’ declaration as the basis for the tax base but sets a lower limit for this declaration:

• Rate: A total fee of 4% is charged, 2% for the buyer and 2% for the seller; this fee is equally split between the buyer and the seller. The President is authorized to change this rate within the limits set by law according to the type and characteristics of the property.
• Tax Base: The fee is calculated on the declared transfer and acquisition price, provided that it is not lower than the real estate tax value (Fees Law Art. 63).
• Payment Requirement: It must be paid to the relevant tax office or authorized banks for the transaction to be completed. If the title deed fee is not paid, the sale process cannot proceed, and the title transfer will not be completed.

Once the official title deed fee is paid, the Turkish Land Registry Office proceeds to the next stage of the sale process by inviting the parties to sign the official sale documents. At this stage, both the buyer and the seller are required to be present at the Land Registry Office to sign the sale contract and related documents. After the signatures are completed, the Land Registry Office registers the property in the new owner’s name and prepares and delivers the title deed.

Timely and accurate payment of official title deed fees in Turkey is crucial for ensuring the legal completion of the transaction and avoiding legal and financial issues in the future. Underreporting property sale price on title deed in Turkey may cause tax losses for the government, and the relevant authorities monitor such cases and apply penalties when necessary.

2. How Is the Title Deed Fee Calculated in Turkey?

Title deed transfer costs in Turkey mainly consist of the title deed fee calculated separately for the buyer and the seller and the revolving fund service fee paid to the General Directorate of Land Registry and Cadastre. While the title deed fee varies with the sale price, the revolving fund fee is a fixed amount determined each year by the administration according to the location of the property.

In some transactions, the Land Registry Office may require a valuation report from a licensed appraisal company; in that case the fee for the report is also added to the costs. To calculate transfer costs correctly, it should be remembered that the value used for the fee is the higher of the declared price and the real estate tax value. Under Article 127 of the Fees Law, no transaction subject to a fee may be carried out until the fee has been paid in full in advance, so, under Turkish law, the title deed fee must be paid before the official deed is signed.

How Is the Actual Value of a Property Determined in Turkey?

The actual value of a property in Turkey is determined independently of the price written on the title deed, by assessing location, physical characteristics and market conditions together. The title deed sale price may not always fully reflect the real value of a property, and determining the actual value of a property in a free market is a complex process that requires consideration of multiple factors.

1. What Are the Key Factors That Determine the Actual Value of a Property in Turkey?

The actual value of a property is not determined solely by the agreement between the buyer and seller; instead, it is shaped by market dynamics, the physical characteristics of the property, and external factors. The key factors to consider when determining the market value of a property in Turkey are as follows:

• Location: The level of development in the area where the property is located, infrastructure availability, and proximity to social amenities (such as schools, hospitals, shopping centers); accessibility provided by transportation networks (e.g., proximity to public transport stops, major roads); and the prices of other similar properties in the area.
• Physical Characteristics: The size of the property, its structural condition, the quality of materials used in construction, and the age of the building; the layout of the property, including the number of rooms, internal equipment, and other physical elements; and the physical condition of the property, such as whether it requires renovation or has potential for improvements.
• Market Conditions: The supply and demand balance in the area and the typical time it takes for properties to be sold; the general economic conditions in the real estate market, such as interest rates, inflation, and other economic factors. Seasonal changes and economic fluctuations can directly influence market prices.

Determining the actual value of a property in Turkey requires the use of multiple methods in combination. The title deed sale price is only the amount reflected in official records, while the market value of the property in Turkey can be more accurately determined by considering local market conditions, the property’s physical condition, expert reports, and environmental studies. The two most reliable sources for determining the actual value of a property in Turkey are the Municipal Property Valuation Certificate and an appraisal report.

2. What Is the Municipal Property Valuation Certificate in Turkey?

The municipal property valuation certificate is an official document issued by the municipality of a property’s location that shows the property’s value. In Turkey, this document is typically required for property transactions, tax payments, inheritance transfer procedures, expropriation, and similar cases. Municipalities consider various factors when determining the value of properties in the area, including the local real estate market, land and property use, infrastructure availability, and regional developments.

The municipal property valuation certificate provides an average value based on the market value of properties in a specific area and is used as a reference for Turkish government tax applications, particularly for property taxes and title deed fees. Municipalities determine the official value by considering the land value in the region and the characteristics of the property; this value is the real estate tax value calculated under Article 29 of the Real Estate Tax Law No. 1319 on the basis of minimum land unit values set by valuation commissions and standard building construction costs per square metre.

Although the municipal property valuation certificate does not reflect the current market value of the property, it shows the local legal value of the property in Turkey, that is, the real estate tax value used in tax and fee calculations. This certificate is generally required for real estate transactions, ownership-related procedures, or any situation involving tax obligations. Law No. 7566 amended Provisional Article 23 of the Real Estate Tax Law, providing that the building and land tax values calculated for 2026 may not exceed twice the 2025 values and that this cap also applies to other financial obligations such as fees.

3. What Is a Property Appraisal Report in Turkey?

The appraisal report value of a property is determined by an independent expert or a real estate appraisal organization, considering factors such as market conditions, physical condition, location, and other relevant elements. This value aims to reflect the property’s real market value and serves as an important reference in Turkish practice for property sales, mortgage applications, insurance procedures, and similar situations.

The appraisal report value is calculated by taking into account various factors, such as the property’s structural condition, its location, market conditions, size, legal status, and any encumbrances or declarations on the property. Unlike the municipal property valuation certificate, the government does not provide appraisal services. Therefore, to determine a property’s value in Turkey, support must be sought from private appraisal firms and professionals. Additionally, the expert preparing the report must be licensed by the Capital Markets Board (SPK), as this license ensures the expert’s competence and professionalism in the field.

4. What Is the Difference Between the Real Estate Tax Value and the Sale Price in Turkey?

In Turkey, the real estate tax value (rayiç bedel) is the value set by the municipality under the Real Estate Tax Law, which forms the lower limit for the title deed fee, while the sale price is the transfer price actually agreed by the parties and which they are obliged to declare on the title deed. Since the real estate tax value often remains below market value, the gap between the two values is the most common form of underdeclaration in practice.

The table below compares three values that are often confused in practice in Turkey. It shows the purpose for which each value is used and its effect on the title deed transaction.

5. How Is the Real Estate Tax Value Calculated and Where Can It Be Found in Turkey?

The real estate tax value used in title deed transactions in Turkey is calculated by the municipality where the property is located under Article 29 of the Real Estate Tax Law, and it is learned through the real estate tax value (rayiç bedel) certificate obtained from the municipality. For land, this value is based on minimum square-metre unit values set by valuation commissions, and for buildings on standard building construction costs per square metre together with the value of the land or land share; the tax value is then, as a rule, increased in later years by the revaluation rate.

For the real estate tax value certificate, one can apply to the real estate department of the municipality where the property is located; many municipalities also offer the “Real Estate Tax Declaration Copy (Rayiç Bedel) Certificate Inquiry” and land unit value inquiry services on Turkey’s e-Government Gateway (e-Devlet). Since the title deed fee cannot be calculated below this value, obtaining the certificate before the sale makes it possible to anticipate the fee correctly.

Can the Sale Be Declared at the Real Estate Tax Value on the Title Deed in Turkey?

Declaring the sale at the real estate tax value on the title deed in Turkey constitutes an underdeclaration within the meaning of Article 63 of the Fees Law if the real sale price is higher than that value, and it leads to the assessment of the fee on the difference together with a one-fold tax loss penalty. The real estate tax value is only a lower limit for the fee; the law requires the parties to declare the real transfer price.

1. Can a Property Be Sold Below the Real Estate Tax Value in Turkey?

Selling a property in Turkey at a price below the real estate tax value is legally possible; however, in that case the title deed fee is calculated on that value, not on the declared price. Since Article 63 of the Fees Law provides that the fee is charged on the declared price provided that it is not lower than the real estate tax value, a declaration below the real estate tax value does not reduce the fee.

If it is later determined that the fee was paid on a price lower than the real estate tax value, the fee corresponding to the difference is assessed additionally or ex officio. Accordingly, under Turkish law, a sale below the real estate tax value does not change the fee burden even where the parties genuinely agreed on that price.

2. What Sale Price Should Be Declared on the Title Deed in Turkey?

The sale price on the title deed in Turkey should be declared as the transfer price actually agreed and paid by the parties; if this price is below the real estate tax value, the fee is charged on the real estate tax value. The law does not recognize a “safe range” between the real estate tax value and the real price.

It should be borne in mind that the real price between the parties may come to light through bank records, loan files, preliminary contracts or real estate agency documents. Where these documents conflict with the price on the Turkish title deed, they may later be used as evidence against the parties both in a tax audit and in lawsuits between them.

3. Can the Valuation Commission’s Value Alone Be the Basis of an Assessment in Turkey?

The fourth paragraph of Article 63 of the Fees Law expressly provides that no assessment may be made under that paragraph on the basis of valuation commission decisions. The administration in Turkey therefore cannot assess an underpaid fee solely on the basis of comparable values in the area or a value set by a valuation commission.

An assessment of an underpaid fee requires a finding, supported by concrete information and documents, that the declared price does not reflect the true situation. In Turkish practice, this finding is mostly made through bank transfer records, loan appraisals and statements of the buyer or seller.

4. Can a Price Higher Than the Real Estate Tax Value Be Declared on the Title Deed in Turkey?

Declaring a sale price above the real estate tax value on the title deed in Turkey is mandatory where that is the real sale price; writing a price even higher than what was actually paid, however, results in a higher title deed fee for both parties, because under Article 63 of the Fees Law the fee is calculated on the declared price, provided that it is not lower than the real estate tax value.

Writing an amount above the real price also constitutes simulation as to the price within the meaning of Article 19 of the Turkish Code of Obligations and creates difficulties of proof against the official deed in disputes between the parties. When the title deed price was the basis against the holder of a right of first refusal, showing a higher price could make it harder to exercise that right; however, since 25 December 2025 the market value set by the judge applies in right of first refusal lawsuits, so this method no longer has any effect against the holder.

What Problems May Arise from Underreporting Property Sale Price on Title Deed in Turkey?

Declaring a lower sales price for property in Turkey or underreporting property sale price on title deed in Turkey can lead to additional fee and tax assessments, tax loss penalties, inconsistencies in loan and insurance processes, and evidentiary problems in lawsuits between the parties. This practice may cause disputes between the buyer and seller, as well as problems during the title deed process in Turkey.

Title deed offices in Turkey require that the actual sale price be accurately declared. When the true value of the property is higher than the declared amount, legal sanctions, such as tax penalties, may apply. Some of the main issues that could arise are:

1. Tax Issues

The title deed fee is calculated on the price declared on the title deed, and sellers often declare capital gains on that price, so selling property lower than its actual sales price in Turkey reduces the fees and taxes the parties pay. However, if the tax authorities detect this discrepancy, both the buyer and the seller will be assessed the underpaid fee and a tax loss penalty for underreporting the sale price. To avoid tax-related issues, it is important to seek assistance from a tax lawyer in Turkey.

2. Insurance Issues

Insurance compensation in Turkey is determined not by the price on the title deed but by the sum insured agreed in the policy and the insured value at the time of loss, so reporting a lower sale price on the title deed does not in itself entitle the insurer to refuse cover. However, if the sum insured was set on the basis of the low title deed price, there is underinsurance under Article 1462 of the Turkish Commercial Code No. 6102, and unless otherwise agreed the insurer pays compensation reduced in proportion to the ratio of the sum insured to the insured value.

3. Loan Issues

When setting the amount of a mortgage loan, banks in Turkey take into account the value established in the appraisal report. Underreporting property value in Turkey creates a clear inconsistency between the loan amount and the price on the title deed; this may be questioned during the loan process, and the loan file and appraisal report may later be used as evidence of the real sale price.

4. Legal Issues

Under Article 1022 of the Turkish Civil Code, rights in rem arise upon registration in the land register, and under Article 7 official registers constitute evidence of the facts they record; ownership therefore rests on registration in the land register, not on the title deed sale price, and a low price does not in itself make it harder for the owner to prove ownership. On the other hand, declaring lower sales price for property in Turkey can be used as evidence against the parties in simulation, misuse of power of attorney or set-aside lawsuits where the validity of the transfer is disputed; these lawsuits are explained under a separate heading below.

In conclusion, underreporting property sale price on title deed in Turkey does not only create tax liabilities and financial problems but can also negatively affect the property owner’s loan and insurance processes and their position in lawsuits concerning the property. Therefore, the actual value of the property should be declared accurately and honestly during the sale process.

Who Is Responsible for Declaring Lower Sales Price for Property on the Title Deed in Turkey and Who Pays the Penalty?

The underpaid fee and tax loss penalty arising from underreporting the sale price on the title deed in Turkey are assessed separately against the buyer and the seller, each in proportion to their own share of the fee. Since Tariff No. 4 attached to the Fees Law provides for the sale fee separately for the transferor and the transferee, both parties bear the consequences of the underdeclaration.

1. Responsibility of the Buyer and the Seller in Turkey

Underreporting property sale price on title deed in Turkey creates liability for both parties involved in the sale transaction. Although the seller usually applies to the title deed office for the transaction, both the buyer and the seller agree on the sale price, so both parties will be held accountable for the consequences of underreporting the sale price; this liability is not joint and several, and each party is liable only for its own share of the fee and the related penalty.

The responsibility for underreporting property value in Turkey should not fall solely on the seller, as the declaration made on the title deed is also approved by the buyer, making both parties equally liable for the content of the declaration. As a result, penalties resulting from selling property lower than its actual sales price in Turkey are imposed on both the buyer and the seller, separately and in proportion to each party’s own share.

2. Is an Agreement That “the Buyer Will Pay the Fee and Penalty” Binding on the Tax Office in Turkey?

An agreement between the parties that the fee or any penalty arising later will be paid entirely by one party is not binding on the tax office under Article 8 of the Tax Procedure Law No. 213. The tax administration in Turkey assesses the underpaid fee and the penalty against both parties in proportion to their shares.

Such an agreement only has effect in the internal relationship between the parties. Under Turkish law, the party making the payment may seek recourse from the other party on the basis of the contractual undertaking, but this claim cannot be used as a defence against the tax office.

3. Does the Legal Status of the Parties Change Liability in Turkey?

The misrepresentation of the sale price in land registry transactions in Turkey by declaring a lower amount than the actual value has serious legal consequences under Turkish tax law, as well as the law of obligations and criminal law. Such practices cause a tax loss under the Tax Procedure Law and thus a tax loss penalty, and also violate general legal principles due to the concealment of the true intent of the parties; the crime of tax evasion under Article 359 arises only where false or misleading documents kept under tax laws are issued or used.

In cases where the sale price is underreported, it makes no legal difference whether the parties involved are natural persons, companies established in Turkey under Turkish corporate law, or branches of foreign companies operating in Turkey. This is because, under the Turkish legal system, the accuracy of the declared value in the land registry is fundamental, and any false declaration gives rise to liability for the underpaid fee and tax penalties for all parties involved, regardless of their legal status or whether the transaction is of a personal or commercial nature. Accordingly, every natural or legal person with legal capacity is bound by the obligation of truthful declaration, irrespective of the nature of the transaction.

4. Why Does Underdeclaration Matter for Tax Fairness in Turkey?

Under Turkish law, declaring lower sales price for property is an unlawful act that causes a tax loss and is sanctioned with a tax penalty. When the sale price on the title deed is reported below its true value, it leads to a lower property value being shown, which in turn reduces tax obligations. This results in a loss of government tax revenues and undermines tax fairness.

The government is responsible for collecting taxes based on accurate and transparent declarations in property transactions; therefore, underreporting property value in Turkey on the title deed damages justice both at the individual and societal levels. Such practices lead to long-term tax losses and undermine the credibility of the tax system.

What Are the Penalties for Underreporting Property Value in Turkey for Title Deed Transactions?

The penalty for underreporting the sale price on the title deed in Turkey consists of the underpaid title deed fee on the difference between the declared and the real price, a tax loss penalty equal to one times that fee, and delay interest. In Turkish law practice, one of the most common irregularities encountered during the transfer of real estate ownership is declaring the sale price below its actual purchase-sale value in order to reduce title deed fees and subsequent tax liabilities.

However, this situation entails serious financial and penal sanctions under both the Fees Law No. 492 and the provisions of the Tax Procedure Law (TPL) No. 213. For the seller, if the property is sold in Turkey before five years have passed, income tax on the underdeclared gain and the related tax loss penalty also come into play. What is called the title deed fee penalty in practice essentially consists of this underpaid fee and the related tax loss penalty.

1. Legal Framework Regarding Title Deed Fees and Recent Legislation Changes in the Penalty Regime in Turkey

Pursuant to Article 63 of the Fees Law No. 492, title deed fees in real estate transfers and acquisitions in Turkey are calculated on the declared transfer and acquisition price, provided that it is not less than the real estate tax value, and are paid separately by the transferor and the transferee at a rate of 20 per thousand (2%) under Tariff No. 4; if the declared price is found not to reflect the true situation, the difference is assessed later. However, the seller, who will pay income tax after the sale, may wish to underreport the value of the real estate in agreement with the buyer. Such an underdeclaration, if detected, can lead to serious legal and financial consequences in Turkey.

In Turkey, a very critical legislative change has taken place in the statutory regulation regarding the sanction to be applied in case an underdeclaration is detected:

• Former Regulation Period: Under the paragraph as it stood before Law No. 7566, in the event that the administration detected that the sale price at the title deed office was underreported, a special tax loss penalty at the rate of 25% was applied to the taxpayers for the fee assessed over the difference. This rate granted a privilege in favor of the taxpayer compared to the general 100% (1-fold) tax loss penalty regime in Turkish tax law.
• Recent Legislative Amendment (Law No. 7566): With Article 6 of Law No. 7566 dated 4 December 2025, which entered into force upon publication in the Official Gazette of 19 December 2025, the words “25%” in the fourth paragraph of Article 63 of the Fees Law were replaced with “one-fold”, and the 25% special penalty rate applied to underdeclared fee statements was completely abolished. With this statutory amendment, underdeclarations in title deed fees in Turkey have been subjected to the general penalty regime of the Tax Procedure Law.

Under current Turkish regulations, if the administration detects that the actual transfer price is higher than the declared amount, the following items are collected:

• The missing fee amount falling to their own share from the parties (buyer and seller) against whom a tax base difference is detected,
• A Tax Loss Penalty at the rate of 100% (1-fold) in accordance with the general principles in Article 344 of the TPL,
• Together with the delay interest to be calculated under Article 112 of the TPL, are assessed additionally or ex officio and collected, not jointly and severally, but to the extent of each taxpayer’s own obligation.

For title deed transactions carried out before the amendment entered into force, which penalty rate applies should be assessed separately in light of the date of the act and the principle of applying the more favourable provision. For this reason, if an invitation to explain or a notice of assessment has been received from the Turkish tax office for a past sale, it is important to check the rate applied against the transaction date.

2. Sanctions in Terms of Income Tax in Turkey

Pursuant to Repeated Article 80 of the Income Tax Law No. 193, regardless of the manner of acquisition (except gratuitous acquisitions such as inheritance and gifts), gains arising from the disposal of real estate within five years from the date of acquisition are subject to income tax as “Capital Gains” in Turkey. Under Repeated Article 81, the gain is found by deducting the cost and the expenses, taxes and fees borne by the seller from the consideration received; the portion of capital gains earned in a calendar year up to the amount stated in the law and updated each year is exempt from income tax.

The seller’s underreporting of the sale price at the title deed office in Turkey can easily be detected as a result of the Ministry of Treasury and Finance subjecting bank transfer records, credit data, and title deed records to cross-checks using data analysis methods. In such a determination, the seller faces not only the missing title deed fee, but also the income tax to be assessed over the underdeclared gain amount, a 1-fold tax loss penalty, and delay interest sanctions.

3. How Is the Penalty for Underreporting the Sale Price Calculated in Turkey?

To calculate the penalty for underreporting property value in Turkey, the difference between the real price and the price declared on the title deed is found first; 2% of this difference for each party is the underpaid fee, and one times the underpaid fee is the tax loss penalty. Delay interest running from the normal due date of the fee until the accrual date of the assessment is added to these amounts; delay interest is calculated on the underpaid fee and does not apply to the tax loss penalty.

For example, if a home in Turkey with a real sale price of TRY 5,000,000 is shown on the title deed at TRY 3,000,000, the tax base difference is TRY 2,000,000. In this case the calculation is made as follows:

1. Tax base difference: TRY 5,000,000 – TRY 3,000,000 = TRY 2,000,000.
2. Underpaid fee: TRY 2,000,000 × 2% = TRY 40,000 for the seller and TRY 40,000 for the buyer.
3. Tax loss penalty: One times the underpaid fee; TRY 40,000 for the seller and TRY 40,000 for the buyer.
4. Delay interest: Calculated on each party’s underpaid fee under Article 112 of the TPL from the normal due date of the fee until the accrual date of the assessment, at the late payment interest rate set under Law No. 6183.
5. Seller-specific liability: If the property was sold before five years had passed, the TRY 2,000,000 difference is also included in the calculation of capital gains.

In the same example, had the 25% rate applicable in Turkey before Law No. 7566 been applied, the tax loss penalty would have been TRY 10,000 for each party. The amendment has therefore multiplied the penalty item by four; under Article 376 of the TPL, the penalty can be reduced by half if an application is made and payment is made on time.

4. How Is Underreporting on the Title Deed Detected in Turkey?

If it is discovered that the sale price on the title deed has been underreported in Turkey, either through routine tax office inspections or complaints, significant penalties can be applied by the relevant authorities. Under Repeated Article 69 of the Fees Law, land registry offices are obliged to report the names and addresses of the transferor and the transferee and the value used for the fee to the tax office no later than 15 days from the start of the month following the transaction, so every sale comes to the administration’s knowledge.

If a tax audit reveals that the sale price has been underreported, the fee on the difference and a tax loss penalty are assessed against the parties. In Turkish tax practice, detection is mostly based on the following sources:

• Bank Records: Transfers and EFTs from the buyer to the seller are compared with the price on the title deed.
• Loan Files: In cases where the property is purchased using a bank loan, if the sale price is lower than the actual value, the bank may report the situation to the tax office; the loan appraisal report and the loan amount are also used as indicators of the real price.
• Statements: Statements of the buyer and the seller may be taken during a tax audit, and mutually consistent statements are used to prove the real price.
• Tip-offs: Reports made to the tax office by third persons or by one of the parties may trigger an audit.

5. What Should Be Done After Receiving an Invitation to Explain in Turkey?

An invitation to explain (izaha davet) is a request made in Turkey, before a tax audit starts or a referral to a valuation commission, for an explanation from a taxpayer where there are signs that tax has been lost, and it is regulated in Article 370 of the TPL. The taxpayer may give an explanation within thirty days of notification of the invitation, and the result of the assessment is notified in writing.

If it is understood from the explanation that no tax loss occurred, the taxpayer is not subjected to a tax audit in Turkey for that finding. If the explanation is found insufficient, and the underdeclaration is completed and the fee on the difference is paid together with a surcharge at the late payment interest rate within thirty days of notification of the assessment letter, the tax loss penalty is imposed at 20%. A taxpayer who has received an invitation to explain cannot benefit from voluntary disclosure under Turkish tax law for that finding, so the invitation should be answered in time with a document-based response after reviewing the bank records and contracts relating to the sale price.

6. How Can You Find Out About the Penalty and Can It Be Challenged in Turkey?

The penalty for underreporting the sale price on the title deed in Turkey is learned through the notification of the tax/penalty notice issued by the tax office; the notice is served electronically on taxpayers included in the electronic notification system and by post on others (TPL Arts. 93, 107/A). Taxpayers can also view assessments made in their name and their debt status through the Revenue Administration’s interactive tax office.

After the notice is served, the main options available to the taxpayer in Turkey are as follows:

• Settlement: Under Additional Article 1 of the TPL, where it is claimed that the tax loss arose from insufficient understanding of the law, error, a material mistake or a difference of opinion with the administration, settlement may be requested within thirty days of notification of the notice; if a settlement is reached, the agreed amount of tax and penalty becomes final.
• Penalty Reduction: Under Article 376 of the TPL, if the taxpayer applies to the tax office within thirty days of notification, undertakes to pay the assessed fee and the remaining penalty on time and does not file a lawsuit, the tax loss penalty is reduced by half.
• Tax Lawsuit: Under Article 7 of the Administrative Procedure Law No. 2577, an annulment action may be filed before the tax court within thirty days of notification; in this route the administration must show with concrete evidence that the declared price does not reflect the truth.

7. Is Underreporting the Sale Price on the Title Deed a Crime in Turkey?

Underreporting the sale price on the title deed in Turkey is, as a rule, a tax misdemeanour resulting in the assessment of the underpaid fee and a tax loss penalty, and it is not regulated as a standalone crime punishable by imprisonment. Article 63 of the Fees Law provides for an administrative tax loss penalty in response to this act.

However, issuing or using false or misleading versions of documents required to be kept and produced under tax laws (such as invoices) to conceal the real price may give rise to the crime of tax evasion regulated in Article 359 of the TPL, which carries imprisonment; in that case the tax loss penalty is also applied three-fold under Article 344. Where the low price is used together with fraudulent conduct to harm one of the parties, general Turkish criminal law provisions such as fraud are also assessed separately.

8. What Is the Statute of Limitations for Underreporting on the Title Deed in Turkey?

The assessment of an underpaid title deed fee and the related tax loss penalty in Turkey are subject to a five-year statute of limitations starting from the beginning of the year following the calendar year in which the fee arose, under Articles 114 and 374 of the TPL. For example, for a sale made in 2026, the fee on the difference must be assessed and notified to the taxpayer by the end of 2031.

Under Article 114 of the TPL, only an application to a valuation commission for the determination of the tax base stops the limitation period; since Article 63 of the Fees Law prohibits assessments of this fee based on valuation commission decisions, this ground rarely arises in underdeclaration cases in Turkish practice. An invitation to explain or a notice received several years after the sale may therefore be part of a legally valid assessment process as long as the five-year period has not expired.

9. Where and How Can Underreporting on the Title Deed Be Reported in Turkey?

A report that the sale price on the title deed has been underreported can be made in writing to the tax office of the place where the title deed transaction was carried out in Turkey. For the report to be examined, the names of the parties, the province, district, block and parcel details of the property, the sale date, and the price declared on the title deed and actually paid should be provided, together with documents where possible.

The administration does not consider a report alone sufficient for an assessment; it verifies the information in the report against bank records and other documents. Reports to the Turkish tax office that do not contain concrete information and documents are therefore unlikely to produce results.

10. Opportunity for Voluntary Correction (TPL Art. 371 – Repentance and Correction)

Before any determination, tax audit, or referral for estimation is made by the tax administration in Turkey, it is possible for the buyer or the seller to report the situation voluntarily, either unilaterally or jointly. Under the Repentance and Correction provisions in Article 371 of the TPL, if the situation is reported by petition before any informant’s report and before a tax audit starts, the underdeclaration is completed within fifteen days and the fee on the difference is paid with the surcharge within the same period, no tax loss penalty is imposed on taxpayers; only the underpaid fee/tax and the repentance interest are collected in Turkey.

How to make a correction through voluntary disclosure is explained step by step under the heading “Can the Sale Price on the Title Deed Be Corrected Later?” below. It should be remembered that the voluntary disclosure right must be exercised before the Turkish administration becomes aware of the situation, and that a taxpayer who has received an invitation to explain cannot use it for that finding.

11. Consequences of Underreporting for Properties Acquired by Foreigners in Turkey

In cases where foreigners acquire real estate in Turkey, the same legal regulations apply if the sale price is falsely declared in the title deed. If it is determined that there has been fraud regarding the sale price, tax penalties are imposed on the foreign buyer or seller in accordance with the relevant legislation.

In addition, if the real estate acquisition was made for the purpose of obtaining Turkish citizenship, an untrue price on the title deed calls into question whether the investment requirement underlying the application is met. If, after citizenship is acquired, it emerges that the decision was made as a result of false statements or concealment of material facts on which acquisition was based, the decision granting citizenship is revoked under Article 31 of the Turkish Citizenship Law No. 5901; under Article 32, the revocation also applies to the spouse and children who acquired citizenship through that person.

In conclusion, declaring lower property value in Turkey not only leads to tax and financial issues but can also have serious legal consequences. Such transactions are unlawful and can result in serious financial sanctions such as a one-fold tax loss penalty, as well as long-term financial and legal responsibilities. Therefore, declaring the actual value of the property on the title deed in Turkey is the best way for both parties to avoid legal liabilities. In order to prevent potential penalties, seeking assistance from a real estate lawyer in Turkey in such cases will help avoid many consequences.

Problems That Can Arise from Selling Property Lower than Its Actual Sales Price in Turkey on the Title Deed

Underreporting property sale price on title deed in Turkey can lead to not only tax issues but also significant legal problems, because the price on the title deed is used as evidence in lawsuits such as claims for the balance, inheritance fraud, misuse of power of attorney and actions to set aside transactions. The sale price recorded on the title deed can be a decisive factor in many legal cases in Turkey related to real estate transactions.

1. Is Underreporting the Sale Price Simulation, and Does It Invalidate the Sale in Turkey?

Showing a sale price lower than the real price in the official deed constitutes (partial) simulation as to the price within the meaning of Article 19 of the Turkish Code of Obligations; however, since the parties genuinely intended the sale, this alone does not invalidate the sale contract. The real price between the parties remains a concealed agreement made without complying with the official form.

Simulation as to the price raises the question of which price will be taken as the basis, particularly in the seller’s claim for the balance or the buyer’s claim for a refund. In these lawsuits in Turkey, proof of the real price is assessed within the rules on proving against an official deed.

In its decision Court of Cassation 3rd Civil Chamber, Docket No. 2022/5514, Decision No. 2022/7505, Date 10.10.2022, Turkey’s highest court held that the parties’ showing a lower price on the title deed in order to pay less tax does not invalidate the contract, since in that case the simulation lies not in the whole contract but only in the price element. The same decision stressed that the party claiming that the price in the official deed is untrue must, as a rule, prove this with written evidence before the Turkish courts; however, where the other side admits that the real price was higher, the burden of proving payment of the balance shifts to the buyer.

2. Does the Title Deed Transfer Prove That the Sale Price Was Paid in Turkey?

The seller’s statement in the official deed of sale that they have “received the sale price in full” constitutes conclusive evidence until proven otherwise under Article 204 of the Code of Civil Procedure No. 6100. In Turkey, a seller who claims after the title transfer that the price was not paid must therefore, as a rule, prove this claim with written evidence.

Where the price was underreported on the title deed, the seller faces difficulties of proof when claiming the balance above the price written in the official deed. An admission by one party that the real price was higher may, however, shift the burden of proof under Turkish procedural law; payments made through banks and supported by documents are therefore the safest route for the parties.

In its decision Court of Cassation 13th Civil Chamber, Docket No. 2016/27784, Decision No. 2019/9852, Date 14.10.2019, the Court examined a dispute in which the official deed stated that the sale price had been received in cash and in full, while the seller claimed a balance based on a higher price. The Chamber held that, under Turkish law, the sale price agreed between the parties must be proven by a written document and that the official title deed sale document had to be assessed, and it reversed the local court’s judgment awarding the claim on the assumption that the title deed price had been understated.

3. Effect of the Title Deed Price in Right of First Refusal Lawsuits in Turkey

For many years in Turkey, in cases concerning the right of first refusal the holder was required to deposit the sale price stated on the title deed, so if the sale price on the title deed was underreported, the person exercising the right of first refusal could acquire the property at the lower declared price. This caused substantial financial damage to the buyer, as the difference between the actual value of the property and the value shown on the title deed did not align with the buyer’s expected profit.

Reflecting this practice before Law No. 7571, in its decision Court of Cassation 7th Civil Chamber, Docket No. 2021/882, Decision No. 2022/799, Date 08.02.2022, the Turkish Court held that the pre-emption price consists of the sale price shown on the title deed plus the fees and costs paid by the buyer, and that the buyer, as a party to the sale contract, cannot plead simulation as to the price against the holder of the right of first refusal, because no one may rely on their own simulation. In this majority decision, the buyer’s claim that the real price was higher was characterised as an abuse of right under Turkish law, and the local court judgment accepting that claim was reversed.

Law No. 7571 dated 24 December 2025 amended the second paragraph of Article 734 of the Turkish Civil Code, and from 25 December 2025 the market value of the share in dispute is determined by the judge. The holder must now deposit not the title deed price but the market value set by the judge together with the title deed costs borne by the buyer within a peremptory period; under Provisional Article 1 of the Civil Code, this rule also applies to lawsuits filed before the amendment. The risk of a low declared price harming the buyer in a right of first refusal lawsuit has therefore largely disappeared.

The same Law also amended Article 733 of the Turkish Civil Code, so that the right of first refusal now lapses three months after the sale is notified to the holder and in any event one year after the sale. Under Provisional Article 1, these new periods apply to sales made after 25 December 2025; the two-year period continues to apply to earlier sales.

4. The Price Difference in Inheritance Fraud Lawsuits in Turkey

Additionally, in cases such as inheritance fraud in Turkey, the sale price on the title deed plays a critical role. If there is a significant discrepancy between the sale price and the property’s actual value, the claim of fraud becomes stronger, and the Turkish court may evaluate the case by considering the underreported sale price.

The underreporting of the sale price on the title deed can serve as evidence that the transfer of ownership may not reflect the true intentions of the parties, and it could be considered a fraudulent transaction. In gifts disguised as sales by the deceased, a low price is used as an important presumption supporting the heirs’ claim of asset concealment under Turkish inheritance law.

5. The Low Price in Misuse of Power of Attorney Lawsuits in Turkey

Similarly, in cases involving the misuse of power of attorney and title deed cancellation, underreporting property sale price on title deed in Turkey could influence the course of the case. In such instances, the sale price on the title deed may be used as evidence to prove that the power of attorney was abused and that the transaction is invalid.

The attorney’s transfer of the property for a price far below its real value is also taken into account by the Turkish courts in assessing whether the buyer acted in good faith. A low price can therefore become an element strengthening the claim that the attorney and the buyer acted in collusion.

In its decision Court of Cassation 1st Civil Chamber, Docket No. 2023/747, Decision No. 2023/5550, Date 17.10.2023, the Court upheld a Turkish regional court of appeal judgment in a title deed cancellation and registration lawsuit where the owner had been deceived and the properties transferred through an attorney and an intermediate owner. In the upheld judgment, the gross difference between the values of the properties determined on site inspection and the values shown in the official deed was assessed together with the buyer’s failure to prove payment and purchase without viewing the properties, leading to the conclusion that the final buyer could not be regarded as acting in good faith and that the title deed registration had to be cancelled under Turkish law.

6. The Low Price in Actions to Set Aside Transactions (Tasarrufun İptali) in Turkey

Under Article 278 of the Enforcement and Bankruptcy Law No. 2004, as amended by Law No. 7571, contracts in which the debtor, unless proven otherwise, accepted a price far below the real value of what it gave are deemed gifts and are subject to being set aside if made within one year before the date of a certificate of insolvency, an attachment report having that effect, or the opening of bankruptcy. Underreporting the sale price on the title deed in Turkey creates a strong appearance of such a low price in respect of the seller-debtor’s creditors.

In that case, even a buyer acting in good faith who paid the real price may end up as a defendant in an action to set aside because of the low price on the title deed. Documenting the payment is therefore of great importance for the buyer to prove before the Turkish courts that the real price was paid.

7. Effect of Underreporting the Title Deed Sale Price on Bank Transfers in Turkey

Underreporting the sale price of a property on the title deed in Turkey creates serious financial and legal risks, particularly where the sale proceeds are to be transferred abroad. Since banks request the official title deed to verify the basis of the transfer, the difference between the actual amount to be transferred and the low price declared on the title deed can be detected immediately. This gives the bank the impression of a suspicious transaction and may lead to the account being placed under review and the process becoming subject to a MASAK investigation by Turkey’s Financial Crimes Investigation Board.

To avoid these legal problems and not to cause legal issues, it is crucial for the sale price to be accurately reported on the title deed in Turkey. Otherwise, both the buyer and seller could face not only tax problems but also risks such as the loss of the property, compensation claims, and other serious legal consequences. Therefore, correct declaration of the sale price on the title deed is a critical factor for both parties’ legal security in Turkey.

Can the Sale Price on the Title Deed Be Corrected Later?

Once the title deed transaction is completed in Turkey, the sale price written in the official deed cannot be changed at the Land Registry Office; an underdeclared price can only be corrected by applying to the tax office through voluntary disclosure and paying the underpaid fee. In practice, a request to “correct the title deed sale price” is therefore addressed to the tax office, not to the Land Registry Office.

1. Can the Sale Price in the Land Registry Be Changed Afterwards in Turkey?

The sale price on the title deed in Turkey is determined based on the amount agreed upon at the time the real estate sale contract is signed, and it can be changed with the mutual consent of both parties. However, once the title deed transaction is completed, it is no longer possible to change the sale price on the title deed.

Title deed transactions are managed by the General Directorate of Land Registry and Cadastre in Turkey, and the information recorded in the title deed is legally considered as evidence. Therefore, correcting the sale price on the title deed is not legally possible after the transaction has been completed.

2. Correction Through Voluntary Disclosure and the Petition to Correct the Title Deed Sale Price in Turkey

In cases where the sale price on the title deed has been underreported, this cannot be corrected by a simple amendment to the title deed. However, the buyer and seller can apply to the tax office and request the correction of the underreported sale price through a remorse declaration, which will allow them to pay any outstanding fees due to the underreporting. The Turkish tax office will make the necessary corrections and collect the underpaid fees together with the repentance interest; if the conditions are met, no tax loss penalty is imposed.

The voluntary disclosure may be made separately by each party for its own share of the fee or jointly by the buyer and the seller. For the application to be effective under Turkish tax law, the following steps must be followed:

1. Where to apply: The tax office of the place where the title deed transaction was carried out.
2. Content of the petition: The parties’ identity details, the property’s province, district, block and parcel details, the date and journal number of the title deed transaction, the price declared on the title deed, the real sale price and the difference, and a request to benefit from Article 371 of the TPL.
3. Timing: The application must be made before any informant’s report, before an invitation to explain is served and before a tax audit begins.
4. Payment: The fee on the difference and the repentance interest must be paid within fifteen days of the date of notification; otherwise the voluntary disclosure provisions cannot be benefited from.

In conclusion, it is of utmost importance that the sale price on the title deed is declared accurately and completely in Turkey. A misreported sale price on the title deed can lead to legal problems and penalties for selling property lower than its actual sales price in Turkey. Therefore, if the sale price on the title deed has been misreported, the parties must promptly apply to the tax office to correct the sale price and pay any outstanding fees; this will help avoid potential legal and financial issues.