Hoteliers React to Excessive Property Tax Hike, TÜROB Warns: Be Sure to Check the New Rates

The increases of more than fivefold made in property tax for the period covering the years 2022-2025 have presented a new bill to tourism and hospitality, the sector hardest hit by the pandemic.

The increases made in the minimum values to be used as the basis for property taxes have presented a new bill to the hospitality sector, the one most affected by the pandemic. Based on the minimum values forming the basis of the 2022 property taxes, which will also be the basis for determining the property taxes for 2023, 2024 and 2025, the new amounts have been posted at the local headman (muhtar) offices. The sector reacted to the increases of more than fivefold compared to 2021 set by the Assessment Commissions in many regions.

Sector representatives stated that, in the minimum unit values underlying the property tax set by the municipalities' Assessment Commissions for 2022, the difficult economic and social conditions experienced by the sector were disregarded and 'unbelievable' levels of increases were made, entirely arbitrary and aimed solely at boosting property tax collection. Sector representatives noted that the amount a hotel would have to pay for 2022 was set at more than five times this year's property tax; and that, starting from 2022, with increases to be made each year, property taxes would reach exorbitant amounts over the next four years.

Deadline for objection is July 30, 2021

A statement from the Association of Turkish Hoteliers (TÜROB) emphasized that complaints on the matter had been received from many parts of Turkey. The statement noted that businesses finding the unit values forming the basis of the property tax, which had been posted and announced at the headman offices, too high should, in order to exercise their legal rights, file lawsuits with the Tax Courts no later than July 30, 2021, and that property tax values not objected to within the 30-day legal period would become final.
It must be annulled.

The TÜROB statement included the following remarks: "At a time when, as a sector, we are going through the worst period in our history, there is no justifiable reason to warrant such an excessive increase in the per-square-meter prices of land plots. In determining the 2022 minimum values, given the reality that there have been no changes capable of increasing the value of the land when the hardships the sector has endured over the past four years are taken into account, there should have been no increase at all. Moreover, while the revaluation and inflation rates and, more importantly, the Covid-19 process and its ongoing effects should have been considered, it is unknown on what measure or criterion the high increases in values determined by the Assessment Commissions in some of our regions were based, and the increase has no legal basis whatsoever. These values, set by the Assessment Commissions far above the market values, not only constitute a violation of the law but also exceed the social purpose of fiscal policy, undermining the principle that taxes be paid in balance with individuals' financial capacity, as well as the aim of public benefit. The fair and balanced distribution of taxation constitutes the most effective instrument of the social state. Yet with these excessive values, the purpose of taxation envisaged in our Constitution and laws has been exceeded, it has become contrary to the understanding of the social state, and it must be annulled."

It should be limited to the revaluation rate
The statement, recalling that in 2017 many Assessment Commissions had set very high unit values for 2018, prompting public backlash and lawsuits, said: "The high level of the 2022 minimum unit values is also of great importance for the years 2023, 2024 and 2025. Taking into account the adverse conditions we are experiencing and their ongoing effects, we have launched efforts before the relevant institutions, primarily the Ministry of Culture and Tourism, to ensure that any increase in property tax is set with a floor of zero and a ceiling limited at most to the 'revaluation rate.'"