New Regulations for Short-Term Rentals in Turkey

In October 2023, Turkey introduced Law No. 7464 on the Leasing of Residential Properties for Tourism Purposes and Amendments to Certain Laws, focusing on the short-term rental of residential spaces for tourism, such as through platforms like Airbnb. The Law came into force on January 1, 2024, and mandates that property owners or those holding limited property rights must secure a special permit from the Turkish Ministry of Culture and Tourism for such short-term rentals, limited to 100 days. This regulation outlines the responsibilities and requirements for both renters and owners and establishes penalties for failing to comply with these regulations. 

This legislative change is aimed at tightening control over the rental market and is seen as a response to significant increases in property prices and rent. Additionally, there has been a rise in legal disputes between property owners and renters after the government imposed a limit of a maximum of 25% per year on rent increases. To bypass these legal complexities, many property owners turned to short-term rentals through online platforms.

In its turn, short-term market analysis indicated that a significant number of properties were being rented out illegally, with about 52 billion Turkish Lira in profit illegally earned over a year from tourist rentals.

What is the New Law in Turkey Regarding Short-Term Rentals?

The new law significantly tightens the regulations in the Turkish property rental market, specifically targeting the growing sector of short-term tourist rentals.

Under new regulations, property owners looking to rent out their residential units to tourists for up to 100 days must obtain a special permit from the Ministry of Culture and Tourism. These permits are issued by the governor's offices in the relevant provinces. Rentals that exceed 100 days are not subject to this rule.

In buildings where apartments are being offered for tourist rentals, specific signs must be displayed, indicating that the property is registered for this purpose. Additionally, for those properties in multi-unit buildings, the owner must obtain unanimous agreement from all other residents in the building before proceeding with such rental activities. This ensures that everyone living in the building agrees with the use of the property for short-term tourist accommodations.

To avoid the transformation of a multi-unit building owned by a single individual into an unregistered hotel, a permit for the same owner can only be granted for up to 25% of the independent sections within the building. If there are more than five independent sections exceeding this limit, the owner will need to obtain a business license.

Under this law, the practice of subletting residential properties for tourism purposes is prohibited as well, preventing tenants from independently engaging in the rental of such properties to third parties. However, corporate entities are permitted to lease residential spaces to their employees. 

All types of accommodation providers, without any exceptions, are required to pay a 2% accommodation tax. Additionally, all services offered by these facilities are also subject to 2% accommodation tax.

What Are The Penalties For Violating The Law?

The new law sets substantial penalties for non-compliance. For the first violation, property owners are fined 100,000 Turkish Lira (about $3,500) per property. This fine increases to 500,000 Lira (around $18,000) for a second violation, and up to 1 million Lira (about $36,000) for further violations. Unauthorized subletting results in a penalty of 100,000 Turkish Lira for each contract in violation.

E-commerce platforms listing rental properties are now obligated to remove any listings that do not have the required permit. Failure to comply results in fines of $3,500 per advertisement.

How The New Law Will Affect The Rental Market in Turkey?

The law represents a significant tightening of regulations in the Turkish property rental market, particularly targeting the sector of short-term tourist rentals, as the landscape of tourist property rentals is set to change significantly. Experts are forecasting an average increase in rental prices by approximately 30% from this year, which is partly due to a likely decrease in the availability of rental properties. 

The additional costs involved in obtaining a license, putting up the plate, gathering necessary documentation, and paying taxes for tourist activities are anticipated to take up a considerable part of the net rental income. This might lead to a competitive situation between the owners of licensed rental properties and one- or two-star hotels in a matter of attracting tourists.

The main purpose of this law is to bring transparency and regulation to the rental sector, enhance the rights and protection of renters, and establish a more secure and fair environment for both property owners and tourists in Turkey's tourism sector.