All you need to know about the “exchange value” or “prevailing value” of a property

كل ما عليك معرفته حول “البدل” أو القيمة الرائجة للعقار

The “exchange value” or “prevailing value” of a property is the fundamental value used to calculate property taxes and other fees. It is also an important factor in real estate transactions, as Turkish law considers the prevailing value as the basis for dealing with properties.

The prevailing value of a property is directly related to property taxes in Turkey. It consists of the value of immovable properties, which changes from year to year depending on market conditions and supply and demand.

Legally, it is defined as the value of immovable properties intended for sale, which is estimated according to the provisions of state law to determine values.

The “prevailing” or “fair” value is the most important element in determining the price of a property for sale or purchase. The sale price of a property cannot be lower than the prevailing value determined by a committee appointed by the Presidency of the Republic, after the assessment decision is issued and sent to the provinces by the Ministry of Finance.

The prevailing value is calculated based on several considerations, including:

Current market value: The value of the property in the current market, which is influenced by factors such as supply and demand, city, neighborhood, residential sector, street, and transportation.

Based on property taxes in Turkey: It represents the minimum value of the property, generally lower than the market value, and is used as the basis for calculating property taxes.

How is the prevailing value of a property calculated? To calculate the fair or prevailing price of a property, such as a house, for example, you need to consider information such as the neighborhood and the prevailing values of at least three other properties. These three properties should be located in the same neighborhood as the desired house.

The calculation method is as follows: The prevailing value per square meter is calculated in the neighborhood where the house is located by dividing the sum of the prevailing values of the three houses by the total area of the three houses. Therefore, the approximate value of the prevailing value for the house is the sum of the prevailing value per square meter in the neighborhood multiplied by the area of the house for which the prevailing value is determined.