Property Valuation Report Guide

Which transactions require an SPK-licensed valuation report, how is it obtained, what does it contain? A summary for home loans, foreign sales and citizenship.

When we say a home's “value”, the listing price usually comes to mind. Yet in some transactions the legislation requires the value to be documented by the report of an authorized valuation firm. In this guide we explain what a valuation report is, in which cases it is mandatory and what to look at in the report.

What is a valuation report?

According to Circular No. 2024/2 of the General Directorate of Land Registry and Cadastre (TKGM), a valuation report is a report prepared, in particular under the International Valuation Standards, by valuation experts working at an authorized valuation firm that is a member of the Union of Valuation Experts of Türkiye (TDUB), in accordance with the regulations of the Capital Markets Board (SPK), TDUB and TKGM. On SPK's website there are communiqués, decisions and announcements on real estate valuation firms, as well as an introductory guide.

In which cases is it needed?

Home loans

Under Article 12 of the Regulation on Credit Transactions of Banks, in loans for acquiring a home and home-collateralized loans, it is mandatory for the valuation of the real estate taken as collateral to be carried out by valuation companies authorized by BDDK or SPK and for this value to be used in the credit limitation. The ratio of the loan amount to the home's value is also calculated on this value.

Real estate acquisition by foreigners

The subject of the TKGM Circular is the valuation reports to be used in the real estate acquisitions of foreigners and in some title deed transactions. If a sale to a foreign national is planned, the report process should be planned before the title deed application.

Citizenship by investment

The Regulation on the Implementation of the Turkish Citizenship Law provides for the investment amount in citizenship by real estate investment to be determined by the Ministry of Environment, Urbanization and Climate Change. According to the Circular, the valuation reports to be used in these determinations may be prepared by any SPK-licensed valuation firm.

How is a report obtained for title deed transactions?

Application: For natural persons the real estate owner, and for legal entities the person authorized to represent, applies through Web Tapu (webtapu.tkgm.gov.tr). If the owner is a Turkish citizen, application can also be made through ALO 181.
Choice of firm: In the application, a valuation firm can be chosen by preference or by an automatic algorithm.
Fee: The fee information, payment period and request number are sent by SMS or e-mail; a request not paid within the period is cancelled. No job is assigned to a firm until payment is made.
Report: The report is approved with an e-signature and sent to TAKBİS, and can be viewed by the person concerned through Web Tapu.

In co-ownership in shares, an application by one of the co-owners is enough. An application cannot be changed to another property; in that case a new application is required.

Validity period of the report

According to the current text of the Circular, the validity period of valuation reports to be used in title deed transactions is 12 months. If the period passes, a new report is requested before the title deed transaction. Also, if it is understood from the land registry between the date of the report and the application date that a situation changing the property's value has arisen (such as a change of type, surrender to road, easement right, various annotations, military prohibited zone declaration), a new report is required regardless of the period.

What to look for in the report

Signatures: The report bears the signatures of at least three people: the responsible valuation expert, the auditor and the valuation expert.
Photographs: At least three photographs are included, at least one of them from the inside.
Legal and existing area: The Circular separately defines the “legal gross usable area” in conformity with the permit and project, and the “existing gross usable area” measured on site. The difference between the two is a sign of extensions contrary to the project.
Market value and value based on legal use: In the report, the property's market value in its current condition and the value found by taking only the legal parts as the basis can be seen separately.
Comparables: The comparable properties are marked point by point on satellite imagery.
Discrepancies: The differences between the legal situation and the actual situation are quantified and shown on the project.

Properties under renovation and construction

The Circular sets different rules according to the renovation status. In simple renovation and repair, a renovation permit is not required; the market value is determined by deducting the amount of missing works and repair from the appraised value. For structures completed in conformity with the project but later begun to be rebuilt through substantial renovation, a renovation permit is required; for properties on which substantial renovation continues without a permit, no value is appraised. For properties under construction, the current value of the completed alternative project and the risks relating to completion are taken into account.

A valuation report and a listing price are not the same thing

The value in the report is the estimated market value determined according to the standards; it may differ from the sale price formed by negotiation. In a home loan, since the bank calculates the loan ratio on this value, a report coming in below the sale price may reduce the loan amount that can be used. For this reason, it is useful for buyers who will use a loan to start the bank's valuation process before paying a deposit.

Complaints and support

According to the Circular, complaints and suggestions about valuation reports may first be conveyed to TDUB. For application and technical matters, TKGM's tasinmazdegerleme@tkgm.gov.tr address is stated, and for system problems the Alo181destek@tkgm.gov.tr address.

Aktif Emlak can help you plan the documents and appointment schedule in a sale or purchase that requires a valuation process.