REAL ESTATE VALUATIONS INTRODUCED FOR FOREIGN PROPERTY BUYERS IN TURKEY
As of March the 4th 2019, foreigners wishing to buy property in Turkey will need to obtain a real estate valuation report before signing for their title deeds. The change in regulations, announced in February by the Turkish General Directorate of Land Registry and Cadastre (TKGM), came about after a pilot scheme in Istanbul successfully trialled the process.
Why Has Turkey Introduced This New Regulation?
Originally planned to be implemented by 2022, Turkey brought the scheme forward to combat tax fraud and irregular pricing declarations. In Turkey, the selling price of a property is declared on the title deeds, and from now on, that price will be the same as the real estate valuation.
Apartment complexes are common properties in Turkey and often sold with 30 or more units in one building. If the construction company has declared lower prices for apartments already sold, the new system will flag irregularities leaving the construction company to face questions by the tax man.
The new law also aims to protect foreign real estate investors who are unaware of Turkey’s housing market tax system and often fall foul of massive tax bills when they later sell the property on or buy properties for more than they are worth.
The government is confident this new report will prevent irregularities in the housing pricing market, and boost Turkey’s brand name for foreign real estate investors.
Valuation Department and SPK Validated Experts
The official department responsible for issuing the reports is the Tasinmaz Degerleme Daire Baskanligi. For a fair countrywide system to be implemented, they are using the same practices as used in other countries and will regularly publish reports and studies about the real estate valuation industry. Appraisals will be carried out by SPK Validated experts who agree to terms, conditions, and standards as outlined by the Capital Market Board of Turkey.
About the Real Estate Valuation Reports
Real estate valuation reports have a three-month validity period in which if the buyer cancels a sale, the seller can use the same appraisal report for another sale. With off-plan properties or homes in the construction stage, the valuation team will estimate the value at the time of completion.
Details listed on a valuation report will match those listed on title deeds, and include but are not limited to location coordinates, prices of property within a certain radius, photos, any debt attached to the home, and confirmed acceptance by the Land Registry and Cadastre Directorate.
Need to Know for Turkey Property Buyers
The cost of the real estate valuation report is between 1000 to 2000TL, and payment must be made directly to the real estate valuation department with the TKGM. Estate agents are not allowed to take a commission on this payment or to market themselves as independent evaluators.
To prevent a conflict of interest, anyone involved with the official process of valuing property or issuing the report is not allowed to own or be employed by an estate agent. The expected period for a report to be generated is six days for Istanbul provinces and three days for the rest of Turkey.
At the time of legally taking ownership for the property, the title deeds office will also enter the real estate valuation report into their system, before returning it to the buyer. Across Turkey, there are roughly 140 officially verified SPK valuators, and we or your lawyer can provide you with a list of choices in the region you plan to buy in.