Real Estate Inheritance Tax is regulated by the law of inheritance and gift tax in Turkey. It is a tax that must be paid as a result of death-related savings such as inheritance, will, inheritance contract or donations, or any kind of unrequited gains.
What are the Exceptions to Inheritance Tax?
Generally speaking, any donations you make during your lifetime and survive for seven years after doing so won’t be included in your estate upon your passing and won’t be subject to inheritance tax.
What are the Cases Exempted from Inheritance Tax?
With the 4th article of the Law, which of the goods transferred by inheritance or gratuitous way will be excluded from the tax, the legislator counted one by one what is exempt from the inheritance and gift tax. According to this;
- Household goods inherited, personal belongings of the deceased, and items such as paintings, swords, medals kept as family mementos,
- 455.635 TL ($24.467,84) for the year 2022 of the inheritance shares of the movable and immovable properties, the values of which are determined according to the 10th article, for each of the offspring and spouse, including adoptees,
- Gifts, devices, dowries, and dowries that are customarily given (excluding real estate),
- All the alms,
- 10,491 TL ($563.40) of gratuitous transfers for the year 2022,
- For the year 2022, 10,491 TL ($563.40) of the prizes won in contests and lotteries and the games of chance defined in the Law No. 5602 on the Regulation of Taxes, Funds, and Shares from Games of Chance,
- Aids duly provided by persons who fall within the scope of paragraphs (a) and (b) of the third article, by their purposes, by their status,
- Public administrations and institutions, institutions subject to the law numbered 3659, and pensions granted to widows and orphans from societies or pension funds (or institutions of such nature), retirement bonuses other than these pensions, marriage bonuses for widows and orphans, and widows and orphans of those who have not completed their service terms lump-sum payments instead of monthly, and the monies paid to the disabled and martyred orphans from the monopoly lords,
- For the officers, non-commissioned officers, and privates (including the Gendarmerie) who died in war or during banditry, during maneuvers and drills or as a result of their injuries, as well as members of the police who died while on duty, and the phrase changed by Article 81/N-1 of Article 81 of the Law No. 4369 ) one fold of the amount accepted in paragraph (b) from the value of all property inherited to their spouses and parents,
- In the case of grants made with the condition of recourse by Article 242 of the Code of Obligations, in case the donor dies before the donor, the donated goods are donated to the donor,
- Goods transferred in ownership, excluding transfers that occur gratuitously between the owners (as long as they remain in ownership),
- Goods allocated to tax-exempt foundations for their establishment or after their establishment,
- Amounts distributed to the owners of vehicles with commercial license plates from the money obtained from the sale of commercial license plates by the traffic commissions authorized by the Presidential Decree in the provinces where license plate restrictions are applied,
- Transactions involving the sale and purchase of immovable cultural assets that are registered under the provisions of Law No. 2863 on the Protection of Cultural and Natural Assets,
- Economic transfers and assistance to be provided to state-owned businesses from the general budget and the budgets of administrations with attached budgets.
How much is Inheritance Tax in Turkey?
With the General Communiqué on Inheritance and Gift Tax Law No. 53 published in the Official Gazette dated 21 December 2021 and numbered 31696, the exemption amounts and the tariff to be applied in the inheritance and gift tax, effective from 01.01.2022, are 36.20%. (thirty-six point twenty) was increased at the revaluation rate.
Accordingly, as of January 1, 2022, the exemption amounts included in subparagraphs (b), (d), and (e) of Article 4 of the Inheritance and Gift Tax Law are listed below.
- 32.779 $ for the inheritance shares falling on each of the offspring and spouse, including the adopted ones (in the absence of offspring, 65.599 $ for the inheritance share corresponding to the spouse),
- 75.474 $ for gratuitous transfers,
- 75.474 $ in prizes won in contests and sweepstakes organized on money and goods, and in games of chance defined in the Law on the Regulation of Taxes, Funds and Shares from Games of Chance dated 14.03.2007 and numbered 5602, will be taken into account.
As of January 1, 2022, the rate of inheritance and gift tax (%) will be calculated according to the following tariff.
Inheritance through succession is listed below.
- %1 for the first 35.971 $,
- %3 for the next 86.330 $,
- %5 for the next 179.856 $,
- %7 for the following 352.517 $,
- %10 exceeding 654.676 $ of the base for the section
Unrequited transfers are listed below.
- %10 for the first 35.971 $,
- %15 for the next 86.330 $,
- %20 for the next 179.856 $,
- %25 for the following 352.517 $,
- %30 exceeding 654.676 $ of the base for the section
Prices vary according to the exchange rate.
Who Pays Inheritance Tax in Turkey?
Citizens of Turkey, in case of transfer of goods from one person to another person gratuitously through inheritance or those to whom goods are transferred without grants, taking into account the exceptions, exemptions, and reductions recognized in the Inheritance and Gift Tax Law, pay Inheritance Tax in Turkey.
Do Foreigners Pay Inheritance Taxes in Turkey?
The acquisition of goods by the citizens of the Republic of Turkey in foreign countries through the same means is also subject to inheritance and gift tax.
However, the transfer of the property of the citizens of the Republic of Turkey, located outside the borders of Turkey, to foreign persons who do not reside in Turkey, through inheritance or gratuitously, is not subject to this tax.
If it is transferred to a foreign person residing in Turkey, it is subject to inheritance and gift tax. On the other hand, the gratuitous transfer of goods within the borders of Turkey is within the scope of taxation regardless of their nationality.
When should Inheritance Tax be Paid in Turkey?
Inheritance and Gift Tax Declaration on inheritance changes according to various conditions.
If the death occurred in Turkey and if the taxpayers are in Turkey, the tax payment should be done. within 4 months following the date of death. However, if the death occurred in a foreign country within 6 months following the date of death; the following conditions for tax payment are as follows.
- If the taxpayers are in Turkey, within 6 months following the date of death,
- If the taxpayers are in the country where the deceased is located, within 4 months following the date of death,
- If the taxpayers are in a foreign country other than the country where the deceased is located, within 8 months following the date of death, – within 1 month following the date of the death registry, in case of absence.
Inheritance and Gift Tax Declaration regarding gratuitous transfers are within 1 month following the legal acquisition of the goods. In the contests, lotteries, and games of chance organized by real and legal persons, the declaration regarding the inheritance and gift tax deducted from the prize winners is submitted by the organizers until the evening of the 20th day of the month following the day of the competition, drawing, and competitions.
In the Tax Procedure Law, two additional declaration periods have been regulated, valid only for inheritance and gift tax. Namely: 15 days are expected, starting from the end of the filing period, to accrue tax liabilities related to inheritance and gift tax.
If the declaration is submitted within this period, no tax penalty will be charged and no interest for delay will be calculated. In addition, 15 days is given again, provided that the taxpayer is notified. If the declaration is submitted within this period, it is considered that there has been no tax loss.
In other matters related to taxation, the guide published on the website of the Revenue Administration can be used.
How Long do You have to Pay Inheritance Tax on Property?
Inheritance and gift tax is paid in six equal installments, in 3 years from the date of accrual and every year in May and November. For example, if the death occurred on January 1, 2021, and the taxpayer filed a statement in March, their payment will be in May and November. If the taxpayer makes a declaration in May, the installments start in November. After receiving the certificate of inheritance, taxpayers can submit a declaration electronically using the Revenue Administration’s Interactive Tax Office, or by hand or mail to the tax office.
How to Avoid Inheritance Tax on Real Estate?
Tax evasion is illegal behavior and is against the laws in Turkey.
What is the Real Estate Inheritance Law in Turkey?
Real estate is defined as immovable property, which cannot be moved from one place to another. The basis of Real Estate Law is real estate. Real estate law is a legal unit that prevents disputes that may occur in the field of real estate and determines the rights of the real estate. Real Estate Law, land, house, flat, apartment, etc. covers legislation related to immovable property. In this context, title deed lawsuits, remuneration lawsuits, rental lawsuits, expropriation lawsuits, and litigation lawsuits are among the subjects of real estate lawsuits.
Who Inherits Property in Turkey?
The legal heirs inherit the property and goods in case of death. The heirs are descendants of the legator, parents, grandparents, legal relatives out of wedlock, right spouse, adopted children, and the state.
What are the Documents Required for Inheritance in Turkey?
The documents to be brought by the parties to obtain the inheritance certificate from the notary are as follows:
- Identity document of the inheritor
- Death certificate of the deceased
- A petition containing the request for a certificate of inheritance is required.
To obtain a certificate of inheritance from the courthouse, it is necessary to go to the courthouse with a petition addressed to the court, and after the fees and expenses are paid, the petition must be submitted to the distribution office.
Obtaining the certificate of inheritance is not enough to make the transfer of the inherited goods.
The documents to be brought by the parties for the transfer of inheritance are as follows;
- Identity document of inheritors
- Certificate of inheritance
- If there is a real estate in the heritage, title deed, and DASK policy regarding the real estate
- The current value letter from the municipality
- Certificate of payment of inheritance and gift tax received from the tax office
- If there is movable in the estate, traffic registration certificate, etc. documents such as the account book must be brought by the parties.
How is Inherited Real Estate Taxed when Sold?
If immovable property and rights are acquired free of charge, the gains arising from the disposal of these goods and rights are not taxed as value increase gains.