Global Property Guide

Financial Information for Residential Property Buyers


Inheritance tax and law

July 08, 2015

The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Turkey: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high are inheritance taxes in Turkey?


Individuals receiving Turkish property through inheritance are subject to taxes in Turkey. Inheritance tax is levied on the inheritance of each beneficiary at progressive rates. The rates vary depending on the taxable inheritance and on the relationship between the donor and recipient.

Spouse and children of the deceased are allowed to deduct TRY109,971 (€36,657) each from the taxable base. If the deceased has no descendants (children or grandchildren), the exemption of the surviving spouse is TRY220,073 (€73,358).

INHERITANCE TAX

TAX BASE, YTL (€)
TAX RATE
Up to 160,000 (€53,333)
1%
160,000 - 510,000 (€170,000)
3%
510,000 - 1,280,000 (€426,667)
5%
1,280,000 - 2,780,000 (€926,667)
7%
Over 2,780,000 (€926,667)
10%
Source: Global Property Guide

Gift Tax

Gifts (land, building) received within one's lifetime are taxable at progressive rates, from 10% to 30%, depending on the value of the property and on the relationship between the donor and recipient. Gifts to spouse and children up to TRY2,535 (€845) are exempted from gift tax.

GIFT TAX

TAX BASE, YTL (€)
TAX RATE
Up to 160,000 (€53,333)
10%
160,000 - 510,000 (€170,000)
15%
510,000 - 1,280,000 (€426,667)
20%
1,280,000 - 2,780,000 (€926,667)
25%
Over 2,780,000 (€926,667)
30%
Source: Global Property Guide

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

INHERITANCE LAW

What inheritance laws apply in Turkey?

Inheritance of real property in Turkey is subject to Turkish law.

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

The main principle regarding jurisdiction over real property is lex rei sitae (i.e. property is regulated by the laws where it is located). Turkish law is therefore the applicable law governing ownership of real property located within the boundaries of the Republic of Turkey.

If the estate of the deceased includes immovable property in Turkey, then Turkish Law is applied, whereas movable assets are subject to the deceased's national law.

Religion or nationality has no effect on jurisdictions concerning inheritance issues; however if a citizen of a country with which Turkey does not have reciprocity inherits real estate in Turkey, then the property is devolved and the real estate is liquidated.

In some cases the foreigner's national law may state that the applicable law for inheritance issues is Turkish law, otherwise known as renvoi. In such cases, Turkish law is always applicable.

If a Turkish citizen owns property abroad and begins a lawsuit in the Republic of Turkey, the applicable law in inheritance issues is Turkish law. If the citizen begins a lawsuit in another country, the law of conflicts of that country decides the applicable law.

The Court of Peace and Court of First Instance are the principal courts which hear lawsuits on inheritance issues. The length of time taken to complete the proceedings is unpredictable, since it depends on the complexity of the case and the caseload of the court.

In the absence of a will, statutory heirs and shares are specified by the Civil Code:

In cases of intestacy, the entire estate is distributed between the heirs as follows:

  • The first statutory heirs are the children of the deceased.

  • In the absence of children, the parents of the deceased are the statutory heirs.

  • If the parents are dead, the grandparents of the deceased and their offspring are the statutory heirs.

  • If the spouse of the deceased is included with children in the sharing of the inheritance, then he/she has a statutory share of one-fourth.

  • A spouse who is sharing the inheritance with the deceased's father, mother, and their offspring has a statutory share of one half.

  • A spouse who is sharing the inheritance with the deceased's grandfather, grandmother, and their offspring has a statutory share of three-fourths.

  • If none of the deceased's next of kin survives, the entire estate goes to the surviving spouse.

  • If the deceased leaves no surviving heirs, the estate becomes the property of the State.


There is a reserved portion in Turkish Law.

A testator is not at liberty to dispose of an estate in the way that he/she wishes. Turkish law imposes restrictions on his/her freedom for the benefit of relatives. The reserved portion is a proportion of the statutory share to which each statutory heir is entitled by intestate succession. Whether or not the reserved portion is applied to the estates of foreigners and members of different religions is defined above. Reserved portions are defined according to Turkish Civil Code as follows:

Children - 75% of the statutory share
Father and Mother - 50% of the statutory share
Brother and Sister - 25% of the statutory share
Surviving spouse with no children - 50% of the statutory share

It is normal to make a will in the Republic of Turkey.

Foreigners who wish to bequeath real property in Turkey should make a will in the form specified by the Turkish Civil Code. A foreign will which does not comply with Turkish law may be invalid in Turkey.

The testator should have full mental capacity, and be more than fifteen years old. In case of error, fraud or duress, the will is not valid. A will may be executed in official form, in handwriting, or orally. An official will is made in the presence of a Notary Public or a Justice of the Peace in accordance with certain formal conditions, and is signed by two witnesses. A holograph is written entirely in the testator's handwriting and must include the place, day, month, and year in which it was made the signature of the testator. A will prepared in this way should be given to the court or a notary public for safekeeping. In exceptional circumstances, an oral will may be considered to fulfil the formalities.

An owner is not free to dispose of property during his/her lifetime.

The disposal of property to whomsoever an owner chooses prior to death may pose problems in the event of his/her death. If the dispositions made in the testator's will exceed the residual amount after the reserved portions, then dispositions made during the testator's lifetime may be subject to reduction.

The property owner is registered in the Title Deed Registry.

Under Turkish law, the owner of real property is determined by the registered ownership and registered rights contained in Title Deed Registry. There are other law concepts, such as possession, protected under certain circumstances.

Property can be inherited by children.

If real property is inherited by a child, the mother and father (who are married to each other) can manage the property including the estate of the said child. Third parties may be appointed to manage the reserved portion of the estate belonging to the child in the will. In the event that the child is not under the supervision of his/her mother and father (who are married to each other) then the child must be under the supervision of a guardian.The issues regarding guardianship are principally set out by law and guardians are mainly appointed by the court.

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