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The process of intergenerational transmission of housing wealth

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2003
Kayıket, Aslı
For several decades, Turkey has witnessed increasing investments in housing. There is evidence that some households benefited from this increase. The transfer of housing assets today is also an extensive social and economic phenomenon different from the traditional processes. There are several issues related to this process the most significant being the universal concern for its contribution to wealth polarization. Supply impacts in the markets are other aspect of the same process. Since greater accumulation of housing wealth has pooled in the hands of household heads aging 50 and more, the process of housing wealth transfers will gain significance soon. No extensive study of this process has yet been made. After reviewing the factors affecting the process of wealth transfers and elaborating the institutional background of inheritance, the intergenerational property transfers in Turkey are examined with the 1994 Households Income and Consumption Expenditures Survey, The Population Census and The Death Statistics of Turkey. It is possible to develop a model to investigate the number of potential benefactors and beneficiaries and, the prospective property transferred in one year as a result of inheritance. Then, the amount of transfer taxes by Ministry of Finance could be compared with taxes realized for the same year, as one method of exploring problems of process of housing inheritance in Turkey. The results depict that in one year 30 477 individual property owners die and approximately 102 000 individuals benefit. It is concluded that property wealth is in general transferred to those who are already homeowners. It is observed that the amount to be taken by the Treasury as inheritance tax should be 13 times greater than the actual amount transferred. And finally, it is concluded that taxation system should not be the only solution for the problems in inheritance