The information in this article is current as of the date of publication; however, this area is subject to frequently changing legislation. It is recommended that current legislation be confirmed and legal counsel be obtained before taking any action. Furthermore, not all information has been covered in this article; after conveying the key points, I have drawn attention to the issues I consider important, and accordingly this article does not constitute legal advice.
INTRODUCTION
The comprehensive legal framework for short-term residential rentals was established by Law No. 7464, published in Official Gazette No. 32357 dated 2 November 2023, and the Regulation prepared pursuant thereto and published in Official Gazette No. 32413 dated 28 December 2023. Until that time, this rapidly growing sector, conducted primarily through platforms such as Airbnb, Booking and Expedia, had operated in a regulatory vacuum, without a coherent licensing regime or a dedicated tax framework.
The fundamental and purported aim of the Law is to create a new source of tax revenue from this activity and to make it safer.
First, the concepts of “dwelling” and “lessor” will be explained in the context of the relevant legislation, followed by the exploration of the basic legal framework addressed in a Q&A format. After providing the foundational information, the serious problems I have encountered in practice regarding law enforcement conduct toward foreign nationals will be examined through a case study.
“Dwelling” means an independent unit registered as residential in the title deed or holding condominium/construction servitude title for residential purposes. Properties registered solely as “land” in the title deed do not fall directly within this definition; however, it could be possible to obtain a permit provided that the term “dwelling” appears in the building registration certificate.
“Lessor” means a natural or legal person holding title, usufruct, or surface rights over the dwelling. Persons who do not hold one of these rights, including tenants, are not entitled to apply for a permit under the current legal framework. “Short-term rental” refers to the rental of a dwelling to the same tenant for a period not exceeding one hundred days.
KEY CONCEPTS
1 – What is the legal basis and purpose of the legislation?
Law No. 7464 and the Regulation issued thereunder establish the legal framework for short-term residential rental. The competent authority is the Ministry of Culture and Tourism. The primary objectives of the regulation are to enhance security through a permit mechanism, to preserve neighbourly peace, and to ensure tax compliance.
2 – Is a permit required for short-term rentals?
Yes, it is mandatory. Application procedures are carried out through e-Government (e-Devlet). Following the issuance of the permit, obligations under Law No. 1774 on Identity Disclosure - including guest identity registration, terminal registration, and other requirements - also become operative.
3 – What was the provisional permit arrangement?
A provisional permit mechanism was introduced for natural or legal persons who commenced operations before 1 January 2024; applications under this scheme were required to be submitted by 1 February 2024. Provisional permits issued under this mechanism became automatically invalid as of 31 December 2024. The administrative sanctions regime has commenced with respect to those who failed to complete the transition process.
4 – How does the 25% quota and the residence-style exemption operate?
In buildings with more than three independent units, the number of permits that may be issued to the same lessor is limited to twenty-five percent of the total number of independent units. Where more than five applications are submitted, a workplace permit also becomes mandatory. Hotel-style properties offering services such as reception, security, and cleaning are exempt from this limitation; for such properties, the permit may be issued directly in the name of the operating company. The precise scope of this exemption remains an area that has yet to be fully clarified in administrative practice.
5 – In what circumstances is condominium owners’ approval required?
In apartment buildings, a notarized unanimous resolution of the condominium owners must be appended to the application; this requirement is non-waivable. For standalone buildings and single-owner buildings, approval is not required. In practice, this step is typically the most time-consuming and operationally challenging in large residential complexes.
6 – What documents are required for an application?
Identity and signature documents (for legal entities: tax identification number, MERSİS [Central Registry Recording System] number, and signature circular); current title deed; where required, a building registration certificate bearing the term “dwelling”; in cases of shared ownership, an owner’s consent deed; unanimous condominium owners’ resolution; where required, a workplace permit; and a UETS (National Electronic Notification System) address.
7 – What are the obligations of intermediary platforms?
Following official notification from the Ministry of Culture and Tourism, failure to remove unpermitted property listings within twenty-four hours may result in an administrative fine of TRY 100,000 per property and an access blocking sanction.
8 – What are the tax obligations?
The principal tax obligations are as follows:
- Income Tax: Continuous short-term rental activity is treated as commercial income and must be declared accordingly.
- VAT: The standard rate of 20% applies.
- Accommodation Tax: Applied at a rate of 2%, calculated separately from VAT. Declaration is mandatory by the 26th of the following month.
- Tourism Share: Monthly declaration is required at a rate of five per thousand (0.5%) on gross revenue.
- e-Invoice: Mandatory for those providing accommodation services as of 1 July 2024.
The question of at what stage a rental becomes a “continuous” commercial activity must be assessed separately on a case-by-case basis.
9 – Can a permit be obtained for a property registered as “land” in the title deed?
Potentially yes; however, it is mandatory for the building registration certificate to bear the term “dwelling”.
10 – Can a permit be obtained for a tiny house or a trailer?
Trailers are classified as towed vehicles under Turkish law and therefore cannot be permitted under this framework. For fixed-foundation prefabricated structures, it may be possible to apply provided the title deed is properly registered.
11 – Can only a single room in a dwelling be rented?
Officially, no. The permit is issued for an entire independent unit; room-by-room rental cannot be permitted under this Law. Those wishing to provide room-based accommodation must obtain a guesthouse or hotel permit.
12 – May additional fees be levied by municipalities?
Yes. Some municipalities apply the Environmental Cleaning Tax differently or introduce additional obligations such as accommodation waste fees. The applicable local regulations must be investigated separately for each property.
13 – Is insurance mandatory?
Insurance is not a legal requirement under Law No. 7464. Nevertheless, in light of the fact that the property will be used by temporary guests, obtaining adequate insurance coverage is strongly recommended.
14 – What is the penalty for failure to make an identity disclosure?
Failure to fulfil the notification obligations under Law No. 1774 on Identity Disclosure is subject to various administrative fines; these amounts are subject to annual revaluation. Announcements regarding current fine amounts are published by the General Directorate of Security.
15 – In what circumstances may a permit be revoked?
Violations such as failure to display the rental sign, exceeding capacity, using misleading advertisements, deficiencies in identity disclosures, and failure to meet physical inspection standards may result in the imposition of an administrative fine and, ultimately, in the revocation of the permit.
16 – My application was rejected; what can I do?
Following notification of the decision rejecting the application, it is possible to apply to the Ministry of Culture and Tourism and, should that application also be rejected, to bring an annulment action against the decision. However, given that this procedure may take approximately two years depending on the province in which it is conducted, it is advisable to attempt to resolve the matter through administrative procedures with the assistance of an expert before resorting to legal action.
CERTAIN PROBLEMS ARISING FROM ERRONEOUS LAW ENFORCEMENT CONDUCT: A CASE STUDY
The framework discussed thus far relates primarily to the licensing, tax, and administrative compliance obligations of the lessor. However, there is another dimension of this Law’s implementation that I believe has not been adequately addressed: the treatment of foreign nationals staying as guests at short-term rental properties during law enforcement inspections, and the legal consequences of such treatment.
I will recount below an incident I personally encountered, as I believe it draws attention to an issue that is both legally significant and insufficiently examined in the literature.
CASE STUDY
In a case I recently encountered, foreign guest A, while staying at a property belonging to my client, was subject to a law enforcement inspection of said property. Although the foreign national staying at the property actually intended to rent it on a long-term basis (8–12 months), no written contract had yet been signed between the parties. Accordingly, there was no legal violation in the incident in question.
In the proper course of an inspection, the foreign national must be provided with an interpreter, informed of their right to access legal counsel and their right to remain silent (Miranda rights), and the use of methods such as threatening or intimidating the person being questioned are unlawful.
The police officers who arrived at the scene began questioning the person without informing them of their rights, asking questions in a language the person did not understand, and then stated that a report prepared in a language the person again did not understand needed to be signed. All communication between the parties was conducted using a rudimentary translation tool such as Google Translate, which rendered the entire process extremely unprofessional.
When the person, understandably not grasping what was happening, panicked and contacted me, they had already signed the report under threats along the lines of “if you do not sign, we will take you to the police station and process you; you will not be released for a long time.” When I read the report, I found that the person - who did not speak Turkish, had no lawyer or interpreter present, and had been subjected to such threats - had signed a document which, in summary, stated: “I rented this property after seeing it on the Airbnb website.”
We naturally filed the necessary objections and commenced legal proceedings promptly against the fines issued on the basis of said report. However, as I find this event deeply concerning, I wished to share it in order to draw attention to this issue for both legal practitioners and potential victims. Such situations unfortunately occur frequently across virtually all areas subject to administrative inspection; in some cases, reaching a lawyer after certain documents have already been signed may make it impossible for the lawyer to have any effect whatsoever. For this reason, no document prepared by law enforcement should be signed without obtaining legal assistance, and one must never forget that law enforcement is always “the other side.”
In summary, anyone wishing to conduct short-term rentals in Turkey must work with a lawyer to take the necessary precautions, both for their clients and for themselves. We endeavor to prevent such unlawful incidents by informing all foreign guests staying at properties where our clients lawfully conduct short- or long-term rentals about their rights. However, the remedy we apply is purely symptomatic. A genuine solution will only materialize on the day that legislators understand that when enacting new legislation, they must also subject those who will implement that legislation to specialized training and instruction. Creating new laws and bringing grey areas under regulatory oversight is of course important and necessary. However, as long as sufficient training is not provided to those who will enforce the new laws - or, perhaps, as long as specialized units in this field are not established - the laws enacted will continue to create as many new problems as they resolve.
The final point I wish to draw attention to on this topic is as follows: Such regulations - which appear to have been enacted more reflexively than with a far-sighted vision of governance - make conducting business in Turkey, which is already extremely difficult, even more so. At this point, a reader might say: “We should not make it easier for rent-seeking commercial activities either.” However, what I am trying to highlight here is that this “lack of a long-term and broad-thinking superior rationality” manifests itself in a great many areas that go far beyond the scope of this article. The outdatedness of our tax legislation, the problems in work permit legislation, law enforcement practices, problems with the integration of powers of attorney issued abroad, and many others are just some examples. All of these issues significantly increase the importance of working with a lawyer who possesses accurate legal knowledge - especially for foreign investors - and may cause investors who do not have proper and effective support to encounter a wide variety of problems.