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Bare ownership - an alternative to the classical inheritance procedure for a property

4th April 2018



International inheritance procedures can be lengthy, complicated and expensive. In Turkey, bequeathing immovable property is particularly hard, as the procedure must be totally in line with Turkish inheritance law.
Considering the possible complications, it is good to know that there is a cheap and rather easy way to bequeath a property while the (future) testator is still alive. You just need to know who you want to own your property after your death.

What does it mean?
In some countries it is possible to donate property to a person/charity, and this procedure is cheaper than the sale of the property. Turkish law does not make a difference between a donation and a sale. This means that one has to pay the full amount of purchase/sales tax (4% of the declared value) to the state, even if a property is donated to one’s own child.
But it is possible to ‘sell’ the bare ownership, while the usufruct (right of use) stays with the previous owner. The holder of the usufruct can use the property or give it for rent until his/her death while the name of the ‘bare owner’ appears on the title deed. The holder of the bare ownership automatically becomes full owner of the said property after the death of the previous owner – no need to deal with courts or pay inheritance tax!

 How does it work?
The current owner and the prospective inheritor apply to the local land registry office (tapu dairesi)
Required documents:
-    A document from the municipality stating the property’s minimum value (rayiç değeri)
-    The title deed (tapu) or the property’s registration details
-    Valid passports of the seller and the buyer (original and photocopy)
-    One passport-sized photo for the seller, two photos for the buyer
-    In most cases: Compulsory earthquake insurance
The current owner declares his/her intention to transfer the bare ownership (‘çıplak’ or ‘kuru mülkiyet’). If the ‘buyer’ is a foreigner and the property is located in a complex, the officer will check whether another property in the same complex has been sold to a foreigner after May 2011. If the property is not in a complex or there hasn’t been any sale to a foreigner since May 2001, military clearance must be obtained for the buyer (takes between 4 and 6 weeks). Then the transfer can be signed (with the assistance of an authorized translator).

What does it cost?
Bare ownership is considered as one third of the full value of a property, while the usufruct counts as two thirds. Consequently, the tax taken for the transfer of bare ownership is only 1/3 of the full 4%. For a property with a ‘rayiç değeri’, minimum value, of 120.000 TL, the minimum value of the bare ownership would be 40.000 TL and the transfer tax (4%) 1.600 TL. Besides, a one-off transaction fee (döner sermaye, approx. 240 TL) and the cost for military clearance (around 500 TL) must be paid.
 
If you require information or assistance with arranging the transfer of bare ownership, please get in touch with YellAli - info@yellali.com

Written by Annette HANİSCH - YellAli Consultant


Content by YellAli - (All Copyright is protected and owned by YellAli - This content may NOT be copied & distributed by another third party, unless appropriate accreditation is given).


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