On the 4th March 2019 the (TKGM) Turkish General Directorate of Land Registry and Cadastre brought into force new rulings for foreign sellers and buyers of proper in Turkey. A valuation is now required prior to the transfer of title deed being handed over in the Deed Offices. The scheme had been piloted in Istanbul and was extremely successful, so although originally due for implementation in 2022 it has now been brought forward.
In January of this year a new Real estate department was established, under the land registry and cadastre and this is responsible for real estate valuations. This new law and valuation system could put construction companies who under declared at the build stage to avoid taxes, with questions to answer to the tax authorities.
The law will also protect foreign buyers who are unaware of the turkish housing market tax system, and ensure properties are not overpriced and tax declarations are correctly reported. The market experts (SPK) which basically translates to Capital Market Board, is the official title of the department and experts responsible for issuing reports these must be impartial representative’s and not employed or associated with a real estate agent or developer.
The predicted reports completed by the SPK is to be set between 1000TL – 2000TL and is to paid by the buyer to the new market appraisal department, no real estate agent will be allowed to complete this report. In many cases the lawyer who you will have engaged who is a member of the Turkish Bar Association will be able to guide you through this process.
The Government is confident this will boost the real estate market in Turkey, by using the same practices used in other countries and will regularly publish its findings about the real estate industry.
So what will the SPK expert be looking for at valuation:-
- Property location
- Photographs of the property
- Prices of other properties in relation(same site)
- Confirmation of the valuation
- Any Current Debts associated with the property
This procedure will take around 3 to 4 days, and there will be SPK valuers spread across Turkey.
These reports will be valid for a period of 3 months, if a sale is cancelled and a new buyer found of the new buyer decides to sell within this period the same appraisal report can be used. If you are purchasing a new property still under construction, then this appraisal can only be done at completion. The valuation figure will be the declared price on the final Title Deed (tapu),and entered into Tapu Office system.
This new procedure will stop developers from under declaring lower figures than the market value on then Title Deed (Tapu), and avoid tax liabilities, going forward this will only be a positive step for the Turkish real estate market and make it a safe country for investors.
