Government Moves to Cap Property Tax Hikes After Public Backlash

A surge in property tax assessments, with some regions seeing increases of up to tenfold, has triggered widespread public outrage and thousands of legal challenges. In response, the Turkish government is introducing a new regulatory framework under the upcoming Omnibus Bill (Torba Yasa) to prevent excessive valuation hikes while maintaining local governments’ fiscal sustainability. The proposal, backed by Vice President Cevdet Yılmaz and AK Party officials, aims to strike a balance between fair taxation and the financial needs of municipalities.

A Legal and Economic Flashpoint

The controversy began after land and property appraisal commissions set new property values in mid-2025, leading to unprecedented jumps in assessed values. In many districts, property owners saw increases of six to ten times their previous tax base. As these new rates were posted in neighborhood offices (muhtarlıklar) by the end of July, public reaction was swift and fierce. Thousands of homeowners filed lawsuits, while many more prepared to challenge the decisions before the September 8 legal deadline.

Recognizing the scale of discontent, the government moved to contain the backlash. Vice President Yılmaz, in a televised statement on TRT Haber on September 11, acknowledged that the increases were “both excessive and uneven across regions,” promising that Parliament would address the issue once the legislative session resumed.

The New Framework: A Cap on Property Value Increases

According to details reported by Ekonomim, the new regulation will introduce an upper limit (cap) on how much assessed land and property values can rise. This cap will apply to valuations conducted by appraisal commissions in 2025, which determine the taxable base for 2026.

The key points include:

• A maximum increase limit will be set to prevent extreme valuation jumps.

• For the 2026 property tax calculations, the base value per square meter of land and property cannot exceed 50% above the 2025 minimum rate.

• The regulation will be formally included in the Omnibus Bill (Torba Yasa) to be submitted to Parliament in the coming days.

Crucially, this cap will not only affect property tax (emlak vergisi) itself but also several associated taxes and fees, including:

• The 10% cultural heritage contribution linked to property tax,

• Valuable Housing Tax,

• Title deed fees (tapu harcı),

• Comparable rental income and capital gains calculations,

• Inheritance and transfer taxes.

This means the proposed limit will have broad fiscal implications, offering relief to homeowners while ensuring predictability across multiple taxation categories.

“We Won’t Ignore Citizens’ Complaints”

Vice President Yılmaz reaffirmed the government’s commitment to fairness:
“These valuations are essentially determined by local governments. However, we cannot remain indifferent to citizens’ complaints,” he said. “A certain level of adjustment is normal, as these updates occur every four to five years. But excessive or unjust increases that place a heavy burden on citizens are unacceptable. We must establish a balance that supports local financial sustainability while protecting citizens from unfair taxation.”

Two Methods Under Discussion

According to Mustafa Demir, AK Party Deputy Chairman in charge of Local Governments, two possible methods are under consideration:

1. Adjusting unit land values directly to correct inflated figures, or

2. Benchmarking new valuations against existing property tax levels to ensure proportionality.

Demir emphasized that the upcoming regulation, expected to reach Parliament in October 2025, would ensure that unrealistic appraisals do not cause undue hardship. “We will not allow citizens to suffer because of property value increases that do not reflect real market conditions,” he said, recalling that President Erdoğan personally instructed the party to act swiftly.

Finding a Balance Between Local Finance and Fairness

The government’s challenge lies in maintaining municipal revenue streams—crucial for local infrastructure and services—while shielding property owners from sharp and unjustified tax surges. The proposed cap offers a middle ground, signaling a shift toward more predictable and transparent valuation mechanisms in Turkey’s real estate taxation system.

If implemented effectively, the new law could serve as a model for sustainable property taxation, ensuring that local governments remain financially viable without overburdening citizens already strained by inflation and high living costs.

The Omnibus Bill is expected to enter the Turkish Grand National Assembly (TBMM) agenda within weeks, marking a decisive step in recalibrating one of the most contested fiscal policies of 2025.