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Currently, there is a great interest in tailoring the polarization properties of composite materials with the goal of controlling the dielectric behavior. This paper reports finite-difference time-domain (FDTD) modeling of the dielectric behavior of two-dimensional (2D) lossless two-phase heterostructures. More specifically, we present extensive results of 2D FDTD computations on the quasistatic effective permittivity of a single inclusion, with arbitrarily complex geometry (regular polygons and fractals), embedded in a plane. The uniaxial perfectly matched layer-absorbing boundary condition is found adequate for truncating the boundary of the 2D space because it leads to only very small backreflections. The effectiveness of the method is demonstrated by the variety of geometries modeled, i.e., regular polygons and fractals, and permittivity contrast ratios which allows us to distinguish between effects of surface fraction and effects of morphology. Our calculations show that geometrical effects can give rise to significant modifications of the surface fraction dependence of the permittivity. The results are compared with Maxwell-Garnett (MG) and symmetric Bruggeman (SBG) formulas. As expected the effective permittivity in the situations considered here deviates from the MG and SBG results at high surface fractions and/or high permittivity ratios between the inclusion and the host medium. In addition, the results show that a two-phase composite containing a fractal-boundary inclusion, e.g., Koch’s snowflake, can have a permittivity which is several tens of percent lower between the first and the fourth iteration of the structure at a fixed perimeter-to-surface ratio. This feature is consistent with the fact that as the surface fraction becomes higher, the inclusion rough boundaries dominate the overall geometry. We believe that simplified modeling such as the modeling done here can serve as a useful purpose in understanding the interplay between the structur- e and dielectric function and in engineering multifunctional materials at the nanoscale.