Expats in Türkiye beware as cash rental payments now come with heavy fines

The Turkish Ministry of Treasury and Finance has intensified its crackdown on tax evasion through cash rental payments.

Following complaints about landlords avoiding taxes through off-the-record transactions, authorities have increased inspections and imposed heavy fines on both landlords and tenants who fail to comply with the legal payment requirements.

Rental payments must be made through banks or PTT to avoid penalties

Recent regulatory changes have made it mandatory for all rental payments exceeding $14 (₺500) to be processed through banks or the national postal service (PTT). Any cash payments above this limit can result in penalties for both landlords and tenants.

According to reports, landlords have been trying to evade taxes by either collecting a portion of rent in cash or avoiding official lease agreements altogether.

Inspectors from the Ministry of Treasury and Finance are now conducting extensive audits, including cross-checking land registry records, bank transactions, and field investigations.

Complaints filed with the Presidential Communication Center (CIMER) and the Revenue Administration (GIB) have played a role in prompting these stricter measures on tracking rental payments.

Landlords and tenants face financial penalties for non-compliance

The updated regulations, enforced since October 2024, stipulate that any violation of the rental payment requirements will result in an administrative fine.

• For each detected case of off-the-record rental payments, a penalty equivalent to 10% of the unpaid amount will be imposed, with a minimum fine of $140 (₺5,000).

• The maximum fine that can be imposed within a single calendar year has been set at approximately $550,000 (₺20 million)

Previously, only landlords were held accountable for these violations, but under the revised legislation, tenants can also face fines.

• Experts advise tenants to insist on bank or PTT transfers for rental payments, as failure to comply could lead to financial penalties

• If a tenant is forced to pay rent in cash, they must report it to authorities within 5 working days to avoid being penalized themselves

Turkish authorities warn tenants, landlords to follow legal procedures

With the removal of the 25% rent increase cap, reports indicate that some landlords have been exploiting the situation by demanding excessive rent hikes while simultaneously avoiding tax liabilities.

This has led to increased legal disputes between landlords and tenants. Authorities emphasize that all rental transactions must be documented to ensure compliance with tax laws.

Authorities warn that non-compliance could lead to severe financial penalties. Officials continue to urge both landlords and tenants to follow legal procedures to avoid severe penalties.