Rental Income (GMSI) Declaration 2026: Exemption, Lump-sum vs. Actual Expenses

Income from the rental of real estate is taxed as Real Estate Capital Income (GMSİ) according to the Income Tax Law. Thanks to the Ready Declaration System of the Revenue Administration, taxpayers' declarations are prepared in advance and submitted for their approval.

Ready Declaration: Access and Process

The system can be accessed in three ways:

• Interactive Tax Office password obtained from the tax office
• Internet banking identity verification
• E-Government password

After logging in, the system lists the rental income attributed to you for the relevant period (especially workplace rents with withholding tax) as ready. If there is missing income, it is added, the expense method is selected, and the declaration is approved.

Exemption and Declaration Limits

Period	Residential Rent Exemption	Withholding Tax Workplace Declaration Limit
2024 (declared in March 2025)	33,000 TL	230,000 TL
2025 (declared in March 2026)	47,000 TL	330,000 TL
2026 (declared in March 2027)	58,000 TL	—

Residential exemption: The portion of the annual residential rent income up to this amount is exempt from tax. The remaining portion is taxed. There are certain conditions to benefit from the exemption (e.g., not being a commercial earner).

Expense Method: Lump Sum or Actual?

Lump Sum Expense Method

15% of the gross revenue (for many years this rate was 25%, then it changed — the GİB tariff should be checked each period) is deducted directly as a lump sum expense. No document is required. Simple, fast, but disadvantageous if your actual expenses are high.

Actual Expense Method

Actual expenses related to the property are deducted. Deductible items:

• Major repairs such as elevators, cladding, exterior facade
• Stamp duty on the lease agreement
• The interest portion of the loan taken for the residence
• Annual dues
• Property insurance premium
• Depreciation (annual 2%)
• Property tax paid to the municipality

However, when the actual expense method is selected, the portion of these expenses corresponding to the residential exemption amount cannot be deducted from tax. The deductible expense amount is calculated with the following formula:

Deductible Expense = Total Expense × ((Total Revenue − Residential Rent Exemption) ÷ Total Revenue)

Numerical Example

For 2025, an annual residential rent of 120,000 TL, actual expenses of 40,000 TL:

• Total revenue: 120,000 TL
• Exemption: 47,000 TL → Remaining: 73,000 TL
• Deductible expense: 40,000 × (73,000 ÷ 120,000) = 24,333 TL
• Taxable net income: 73,000 − 24,333 = 48,667 TL

Rent in Foreign Currency

If rental income is received in foreign currency, the gross revenue is converted to Turkish Lira based on the Central Bank of the Republic of Turkey's foreign exchange buying rate on the date of collection. A separate rate is used for each payment; the average rate is not valid, the rate of the collection day is valid.

Withholding Tax Workplace Rent

In workplace rents, the tenant (commercial enterprise) usually withholds 20% withholding tax. There is no declaration obligation if the workplace rent income with withholding tax remains below a certain limit — the tax is already considered to have been withheld. For the 2025 period, this limit is 330,000 TL.

Penalty for Incomplete Declaration

• For rental income not declared or incompletely declared, a tax loss penalty (50%–100% of the missing tax)
• Late payment interest (monthly)
• Violation penalty
• In the case of repeated violations, it may fall within the scope of severe tax penalties

Declaration periods are in March. It is approved via Ready Declaration with e-signature or Interactive Tax Office password. If the date is missed, it can be declared with the Regret Provisions.