“Republic of Turkey
Istanbul
Tax Court
Case No.: 2014/908
Decision No.: 2014/1704
CASE SUMMARY: The case seeking the cancellation of a lawsuit filed regarding the refund of 2,260,549 TL in paid land registry fees and taxes due to construction during land registry procedures in March 2014 for parcels No. 1342.1 and No. 1343 in İkitelli Neighborhood, Başakşehir, Istanbul; and requests for exemption from all taxes and fees accrued pursuant to the law regarding the acceptance of the fee paid under Article 6306 of Law No. 775 on Areas Under Disaster Risk.
DEFENSE SUMMARY: The law regarding land not belonging to shantytowns refers to structures built without the property owner’s consent; since allocations from this area are primarily intended for low-income or impoverished individuals, the defense argues that the plaintiff should be barred from benefiting from the provisions of Law No. 775, Article 6306, and that the case should be dismissed, except for legal exceptions.
IN THE NAME OF THE TURKISH NATION
The decision was rendered by the 9th Chamber of the Istanbul Court of Appeals. T he Tax Court reviewed the case and deliberated on the necessity of the proceedings:
The dispute arises from a request for the cancellation of the land registry fee of 2,260,549.49 TL paid during registration and the refund of the tax paid.
Article 57 of the Fees Law No. 492 states, “Land registry and cadastre transactions are subject to the land registry and cadastre fees listed in Schedule No. (4) attached to this Law.” (4) Paragraph 20(a) of Schedule No. 4 provides that a fee corresponding to the property tax value shall be paid, based on the declared transfer and purchase price of the property, in accordance with an agreement to assume responsibility for the maintenance of the property, or until death, or in accordance with the provisions of the ramp, and Article 7.9 of the Special Law No. 6306 on the Transformation of Areas Under Disaster Risk
Article 7.9 states: “Pursuant to this Law, transactions, contracts, transfers, and registrations, as well as applications; notary fees, land registry fees, municipal fees, stamp tax, inheritance and transfer taxes, revolving fund fees, and other fees; and amounts received in favor due to loans used are exempt from bank and insurance transaction taxes.”
Article 33: “The Public Housing Administration may, by agreement with the owners of such structures and facilities, purchase or expropriate privately owned lands and plots for use in the services provided for in this Law. With the permission of the Public Housing Administration and the Presidency, municipalities are authorized to construct public housing, core housing, and guesthouses for temporary use for the purposes of rehabilitation, clearance, and slum prevention.” According to these provisions, the implementation of the zoning plan, environmental planning, and related matters in locations designated by the Council of Ministers are also included under this provision. It is stated that the Ministry of Environment and Urbanization and TOKI are authorized in these matters.
1. In the relevant article of Law No. 775 on Squatter Settlements: “The provisions of this law apply to the rehabilitation and clearance of existing squatter settlements, the prevention of new squatter settlements, and the measures to be taken for these purposes.” Article 33 states: “The provisions of this law apply to disputed transfers, assignments, expropriation, purchase, sale, lease, repurchase, redemption, transfer, merger, registration, change of classification, establishment and cancellation of liens, correction, amendment, repair, construction, and supply, as well as all transactions, contracts, declarations, etc., related to savings bonds, and are exempt from all taxes, fees, and charges.”
An assessment has been made in accordance with the above provisions of the law; while it is accepted that real estate transfer expenses are subject to compensation, pursuant to Law No. 6306 on the Acceptance of Areas Under Disaster Risk and Law No. 775 on Squatter Settlements, expenses incurred in transactions conducted in accordance with the laws governing title transfer and registration are exempt from this scope. Accordingly, pursuant to the aforementioned law, it has been concluded that the application will benefit from the specified exemption within the scope of urban transformation and slum prevention.
From the file review: It has been determined that in the sale of real estate constructed by Akdeniz Construction and Education Services Inc. on the land in question—specifically Lots 1342-1 and 1343-1 in the İkitelli Neighborhood of Başakşehir—under an income-sharing agreement with the plaintiff, with the approval of the Prime Ministry Housing Administration, and that the company subsequently filed this lawsuit seeking the cancellation of the title deed and a tax refund.
It is alleged that the sales made by the plaintiff are tax-exempt and that Istanbul 8 also stems from the same incident. Tax Court Case No. E:2013/3138: Akdeniz Construction and Education Services Inc., based on documents and information regarding the zoning status, which indicate that the construction site is located within a slum prevention zone or an urban renewal area, Following the review of the documents submitted in response to the interim decision dated May 8, 2007, No. 2222, and the requested contract sample,
the Prime Ministry Public Housing Administration’s document dated May 8, 2007, No. 2222, confirms that the subject of the lawsuit is the Küçükçekmece, Başakşehir, and İkitelli neighborhoods. Plots No. 1342, Block 1, and No. 1343, Block 1, in the Ayazma Region, in accordance with Law No. 775 on Squatter Settlements, including the areas registered on the parcel, and it was determined through the Urban Planning Status Certificate No. 283779 dated October 20, 2011, issued by the Urban Planning Directorate of Başakşehir Municipality and the Urban Renewal Area Urban Planning Status Certificate, that the area falls within the scope of the Urban Plan.
In this context, it has been determined that both Law No. 6306 on the Urban Planning of Areas at Risk of Disaster and the Squatter Settlement Law exempt the plaintiff from fees; the fees accrued in the name of the plaintiff and the contractor Akdeniz İnşaat A.Ş., paid by the plaintiff through registration, and collected in this manner, must be refunded since there is no legal impediment to the refund of the paid fees.
The grounds for accepting the above claims, following the decision regarding the refund of the amount paid to the plaintiff and the amount to be paid to the plaintiff due to the defendant’s assumption of administrative control, as well as the cancellation of fees, expenses, and court costs, and the payment of the 750.00 TL amount (of which 64.00 TL is due) to the plaintiff, the decision, which was served by registered mail, was finalized, and it was unanimously decided on June 30, 2014, that the amount must be refunded to the plaintiff within 30 days of the announcement of the decision and that the right to appeal to the Council of State must be granted.