Although owning a property can provide financial benefits, there are several important factors to consider when inheriting a property. When inheriting, there is paperwork, legal proceedings, and financial considerations such as inheritance tax in Turkey to complete. The best way to move forward is to comprehend the ins and outs of regulations of inheritance tax in Turkey. You can find answers to the most frequently asked questions in terms of inheritance tax in Turkey in our article.
Here are the answers to top 5 questions that we receive most regarding this matter;
Question 1 – What is inheritance Tax?
An inheritance tax is a tax imposed by Turkish government on those who inherit a property of a deceased person. In order to own a property through inheritance, the person –heir at law– has to pay this tax.
Question 2 – Do foreigners have to pay inheritance tax in Turkey?
Yes. When properties owned by foreigners are subject to Turkish laws, in other words located in Turkey, inheritance tax in Turkey is levied. The tax system of the Turkish government applies both to foreigners and to Turkish citizens alike. Therefore, in this regard citizens of all countries are considered as Turkish. Thus, heirs who inherit property in Turkey are liable for inheritance tax in Turkey.
Question 3- How much of inheritance tax do heirs have to pay?
Compared to most countries in the world the rates of inheritance tax in Turkey is low. The tax rate percentage varies based on the value of a property. Thus, the lower-value properties pay a lower tax and high-value properties pay a higher tax.
Below we present you the current list of tax rate percentages.
BASE VALUE AMOUNT* TAX
- The first 380.000 TL 1%
- Following 900.000 TL 3%
- Following 1.900.000 TL 5%
- Following 3.600.000 TL 7%
- More than 6.780.000 TL 10%
*Please note that, each year, the base values are calculated in comparison to the previous year, and the revaluation rate is applied on top of it.
Question 4 – Are there any exceptions of inheritance tax?
Not all items are subject to inheritance tax in Turkey. Some assets are exempt from this tax. We list some of them as follows:
- Household items handed down over the generations, as well as the descendant’s personal belongings and heirlooms such as paintings, swords, and medals.
- For property transferred as inheritance: 334.534 TRY of the inheritance shares for each child and spouse for 2021, 669.479 TRY of the inheritance shares corresponding to the childless spouse and only the heir.
- A gift that has become a tradition to give according to traditions and customs
- Gifts, dowry, devices and other things that has become a tradition to give as per traditions and customs (Immovable properties are not included.)
Here is an exemplary calculation:
A British, Russian or German citizen, who is without a wife but two children, owns a property in Belek. His life unfortunately comes to an end and automatically legates this property to his children.
Now, how would be the tax exemption?
- Firstly, the taxable property value must be taken into consideration. Let’s assume it as 1 million TRY.
- Since he has two children, each child’s inheritance is 500.000 TRY.
- The law grants the exception for 334.534 TRY of the inheritance shares for each child.
- As a result, each child is liable for taxes at 1% on 500.000 – 334.534 = 16.466 TRY which is 1.654,66 TRY.
Question 5 – How to declare for inheritance tax?
The heirs must give a declaration form to the Tax office. The office calculates the payable tax amount. This amount is then paid at the Tax Office.
A few documents must be attached to the Declaration for Inheritance Tax:
- Certificate of Inheritance (Heirs can take this certificate from the Courts of Peace.)
- Records and documents of debts and expenses.
- Commercial financial statement (income document) and balance sheet
- For real estates: A photocopy of the title deed and an official document from the municipality indicating the property tax valuation.
- Death certificate
Before giving the declaration form to the Tax Office the heirs must have:
- Valid Passport
- Turkish Tax Number
The complexity and all the legal requirements involved in receiving an inheritance can be overwhelming to do by your own. We are not even mentioning the emotional burden that you need to handle at the same time. We suggest you to get the services of an expert prior to any legal transaction by contacting a property solicitor. Should you need any further clarification, please feel free to contact us.
