The Transfer-Inheritance Tax and Inheritance Law in Turkey

The Transfer-Inheritance Tax and Inheritance Law in Turkey

Real estate investors and property seekers are often concerned about safeguarding their assets in the unnatural event of their death. While the Turkish government has the most transparent and fair regulations for national and foreign property buyers, the prominent legalities and figures of the inheritance law are lesser-known. 

What are the procedures and laws in relation to inheritance in Turkey?

How will the property of a deceased owner be handled and who will be the rightful heir?

Can the government acquire the property of a foreign investor after his death?

Are there any transfer-inheritance taxes?  

Does the tax rates differ for foreigners and Turkish citizens?

In this article, we will shed some light on the facts and regulations related to the inheritance tax and laws in Turkey. With answers to the most pressing questions about the legacy of real estate, we will provide a comprehensive guide to the local and foreign property owners for rightful inheritance. 

Turkish Inheritance Law

The inheritance law in Turkey is a part of Civil law that rightfully regulates the fate of the assets after the death of an individual. If the deceased does not write a will or otherwise does not provide for their real estate distribution at death, it will be allotted in the name of his/her inherent among their next of kin.  

If the deceased person did not leave his legacy licitly to anyone alive, the inheritance of assets is shared among legal heirs, and if there’s no alive successor, the property is taken over by the Turkish government.

Who is the immediate heir?

In the absence of an officially certified intent letter or will, the legal heir of immovable properties in Turkey are determined in the following manner:

  • The first heirs of the deceased person are the children and spouse who receive a specific share.
  • If the deceased person does not have a kid, then the property defaults to his parents as legal heirs.
  • If the parents are no longer alive, the siblings get the right to inherit the property. 
  • In the last order of succession, the grandparents of the deceased and their grandchildren are entitled to hold the property.

If the deceased property owner has no next of kin, the estate is acquired by the government of the Republic of Turkey.

Documents required for transferring the Turkish property to legal heirs

The following documents must be submitted by the legal heir in order to transfer the property in his name:

  • An inheritance inventory, stating rightful heirs and kinship, in Turkish language or a certified translation of the copy.
  • Turkish tax number along with the tax registration details.
  • A valid passport.
  • Photographs.

How can a Turkish inheritance lawyer assist?

According to the Turkish inheritance law, the bequest does not go directly to the heirs. The legal advisors and inheritance lawyers mull over an array of situations and consider cases as follows:

  • Rejection of inheritance case
  • Deed cancellation case
  • The case of dissolution of the partnership
  • The case of cancellation of inheritance certificate

Inheritance tax

In accordance with the legal regulations in Turkey, any immovable property of the deceased owner is subjected to inheritance tax.

As compared to other countries in the European Union, the value of the inheritance tax in Turkey is relatively lower. It varies according to the value of the investor’s property, for instance, the lower the price of the property, the lower is the taxed percentage.

Depending on the geographical location of the property and the residence status of the heir, the rate of inheritance tax varies from 1% to 30%.

The following insight represents the rates of inheritance tax based on the real estate values in euros. 

  • 1% for properties with value 53,333 euros or less
  • 3% for properties with value between 53,333-170,000 euros
  • 5% for properties with value between 170,000-426,667 euros
  • 7% for properties with value between 426,667-926,667 euros
  • 10% for properties with value over 926,667 euros

Gifts (buildings, lands) received within one’s lifetime stand taxable at progressive rates between 10% to 30% depending on the relationship between the recipient and the donor as well as the value of the property. Gifts to children and spouse of values up to 845 euros are exempted from gift tax. The following points show the rates levied as gift tax:

  • 10% tax rate for value up to 53,333 euros
  • 15% tax rate for value between 53,333-170,000 euros
  • 20% tax rate for value between 170,000-426,667 euros
  • 25% tax rate for value between 426,667-926,667 euros
  • 30% tax rate for value over 926,667 euros

The applicable tax rates are lowered by 50% for gifts received from children, spouse, and parents.

In what ways do the laws apply to real estate owners in Turkey?

The main laws concerning the Turkish inheritance law are the Code of Civil Procedure, Law on Code of International Private and Procedure Law, and the Turkish Civil Code. 

The main principle in relation to the jurisdiction over real property is ‘lex rei sitae’, i.e. the property is fully regulated and governed by laws where it is located. 

Turkish laws are therefore the applicable laws governing the ownership of real estate located within the boundaries of the Republic of Turkey. If the estate of the deceased involves immovable property in the lands of Turkey, the national statutory laws will be applied, whereas movable assets are subject to the deceased’s home country laws. 

Inheritance tax for foreigners in Turkey

The Turkish tax system is equally applicable to the national and foreign property owners in Turkey. The citizens of all countries, if they own real estate in the country and have a valid Turkish passport, are treated as Turkish citizens. They are liable to pay inheritance tax as other Turkish nationals.

If you wish to evaluate and explore more about Turkish laws pertaining to the real estate industry, get in touch with our legal experts here. 

 

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