To be able to sell a property to a foreign buyer in Turkey, the regulations have, since 2019, required a current valuation report prepared by an SPK (Capital Markets Board) licensed valuation company. This requirement was introduced to ensure that the transaction is carried out on the basis of the true market value, and to prevent tax loss arising from speculative or under-declaration. Given the intense foreign buyer demand on the Bodrum peninsula, the sale-to-foreigner valuation process is among the matters most frequently encountered in the field.
Summary: Since 2019, an SPK-licensed valuation report has been mandatory for all property sales to foreign nationals. The report is valid for 3 months and must be submitted to the land registry office before the title transfer. The process — document collection, on-site inspection, comparable research and report preparation — generally takes 3 to 5 business days.
Why Is It Mandatory? Legal Basis
The valuation requirement for property sales to foreign nationals was brought into effect by amendments to the Land Registry Law No. 2644 and the related circulars of the General Directorate of Land Registry and Cadastre (TKGM). The basic aim is to ensure that the title transfer matches not the declared value but the true market value determined by an independent appraiser. In this framework:
- The organisation preparing the report must be a real estate valuation company licensed and listed by the SPK.
- The appraiser signing the report must hold the title of SPK-licensed real estate appraiser.
- The report is valid for 3 months from the date of preparation; if this period is exceeded, a new report is required.
Reports prepared within the scope of real estate appraisal in Bodrum services are drawn up within the framework of the International Valuation Standards (IVS) and SPK regulations, and are accepted by the land registry offices.
Who Needs It?
In the following cases, an SPK valuation report is mandatory:
- Foreign individuals: A report is required before the title transfer for every buyer who does not hold Turkish citizenship.
- Legal entities established or co-owned by foreign individuals in Turkey: The requirement also applies where a decisive portion of the company shares belongs to foreign individuals.
- Citizenship by investment applications: In this process the valuation report is both mandatory and serves as the fundamental document for determining the investment threshold.
Although there is no similar requirement for sales between Turkish citizens, in transactions where a bank loan is used a bank appraisal report is additionally required.
Required Documents
To begin the valuation process, providing the following documents is sufficient:
- A copy of the title deed or the property’s block/parcel/independent-section number
- UAVT address information (if available)
- Identity information of the buyer and the seller
- The condominium title deed or the building occupancy permit (if applicable)
- A lease agreement if available (for commercial properties where the income method will be applied)
The encumbrance document (mortgage, attachment, annotation query) can be obtained by the appraiser through the TKGM systems; it does not have to be submitted by the buyer or the seller.
Step-by-Step Valuation Process
The following steps show how a standard SPK valuation report is produced in the sale-to-foreigner process:
- Request and preliminary information gathering: The property information is shared with the appraiser by the buyer, seller or lawyer/real estate advisor. The scope and timeline are clarified.
- Title and TKGM enquiry: The land registry record information, encumbrance status (mortgage, attachment, usufruct right, annotation), owner information and land share are confirmed.
- UAVT address and coordinate verification: The property’s address code and coordinates in the UAVT (National Address and Spatial Management System) are queried; the geographic location is clarified.
- On-site inspection and photography: The appraiser examines the property on site; the building quality, façade, floor, age, use status, view and surrounding conditions are documented.
- Comparable research: Current sale and rental data realised in the area is compiled; a comparison is made with properties of similar location and character from the same period.
- Zoning and conservation-area enquiry: Zoning status, TAKS/KAKS values, conservation areas (natural, archaeological, urban) and any development restrictions are confirmed through the municipality or the relevant authority.
- Value determination — three methods: Market value is calculated using the sales comparison method, the cost method and (if applicable) the income capitalisation method; the results are reconciled to determine the final value.
- Report preparation and delivery: The report, prepared in accordance with the SPK format and the International Valuation Standards (IVS), is signed and conveyed to the buyer, seller or their representative.
On the Bodrum peninsula, foreign buyer density is particularly high in the Yalıkavak, Turgutreis and Gümüşlük areas. For properties in these areas the comparable database is extensive and the inspection process runs more efficiently.
Submission of the Report to the Land Registry Office
The completed valuation report is presented to the land registry office where the property is registered during the title transfer transaction. The land registry office confirms, via the SPK licence query, whether the report was drawn up by a licensed organisation. If the report’s validity period of 3 months has been exceeded, the transfer transaction is not carried out; in this case a new valuation report must be prepared.
If the seller or buyer is abroad, it is possible to conduct the transaction through an authorised representative with a notarised or apostilled power of attorney. The use of a power of attorney is a common method among foreign buyers coordinating the process remotely.
Foreign Currency and Transaction Considerations
In sale-to-foreigner transactions the valuation report is drawn up in Turkish Lira (TL); however, in the title declarations conversion to foreign currency and the Central Bank rate may be taken as the basis. In this framework, some points to be aware of are:
- The valuation report must be drawn up on a date close to the date the title transfer takes place (within the 3-month validity limit).
- The TL equivalent of the sale price determined in a foreign currency is calculated at the current rate to form the title transfer fee base; it is advisable to obtain further information on this matter from the land registry office and/or a financial advisor.
- In citizenship by investment processes, for determining the minimum investment amount, it is advisable to additionally verify whether the report was prepared by an organisation approved by the relevant ministry.
For comprehensive technical information about the reports submitted in the valuation process, you can examine the guide on the sections and terms of the valuation report.
Frequently Asked Questions
Is a valuation report mandatory for property sales to foreign nationals?
Yes, under the regulations that came into force in 2019, a valuation report prepared by an SPK-licensed valuation company is mandatory for all property sales to foreign nationals. The title transfer is not carried out unless the report is presented to the land registry office.
How many days is an SPK valuation report valid?
The valuation report used in the sale-to-foreigner process is valid for 3 months from the date of preparation. The title transaction must be completed within this period; otherwise a new report must be drawn up. To allow for the possibility of the process being prolonged, it is advisable not to leave the report to the last minute.
With which documents can I request a valuation report?
To request a report, the title deed or title information (block/parcel/independent-section number), UAVT address information and identity information of the buyer and seller are sufficient. For some homes in Bodrum a condominium document or a building occupancy permit may also be requested. The encumbrance document can be obtained by the appraiser.
How long does the valuation process take?
For residential and land the standard period is generally 3 to 5 business days. In transactions accompanied by a bank loan it can be reduced to 2 to 3 business days; hotels, large commercial buildings or mixed projects may take 7 to 10 business days. In Bodrum, an increase in demand during the busy season can affect the timeline; for this reason it is advisable to make an appointment in advance.
To which land registry office is the valuation report submitted?
It is submitted to the land registry office where the property is registered. For transactions on the Bodrum peninsula the Bodrum Land Registry Office is generally the authority; however, for some areas such as Turgutreis the relevant district office may be the basis. If the buyer or seller is abroad, transactions can be conducted with an apostilled power of attorney.
Which areas in Bodrum are most preferred by foreign buyers?
Yalıkavak, Turgutreis and Gümüşlük are the areas with the highest concentration of foreign buyers. For properties in these areas the comparable pool is extensive and the valuation process proceeds more efficiently. On-site inspection and valuation services are available for all three areas.
Related Pages
- Sale-to-Foreigner Valuation — valuation services for property sales to foreign nationals
- How to Read a Valuation Report? — its sections, terms and the points to pay attention to
- The Difference Between a Bank Appraisal and an SPK Valuation — which report is required in which process
- Bodrum Real Estate Appraisal — SPK-licensed valuation services on the peninsula
For an appraisal request and a quote, you can reach us via the contact page.