July 30, 2024
Almost everyone eventually faces a situation where a real estate valuation is required. To ensure the process is carried out correctly, it’s important to understand how and by whom it is conducted, which documents are needed, and what to do if the appraised value differs from the market price.
Real estate valuation is the process of determining the value of a specific property (or a share of it) for purposes such as purchase, sale, gift, inheritance, and many other cases. Without an expert valuation, you cannot complete most legally binding transactions with the property.
Main Reasons to Value an Apartment
Most real-estate–related situations involve a valuation. The most common cases include:
- Buying / selling / renting real estate
- Allocating ownership shares among company founders
- Division of inherited property
- Gifting real estate
- Contributing property to a company’s charter capital
- Insuring real estate
- Prior to demolition of a house/building
- Holding an auction or listing for public sale
There are other reasons as well, but all are tied to transactions and rights in the property. Each valuation states a specific value as of a specific date and is documented in a detailed report describing the calculations performed and the valuation methods used.
How the Purpose Affects the Appraiser’s Fee
People request valuations for different reasons: selling an apartment, exchange, gifting or inheritance, taking out a mortgage or a loan. Fees may vary accordingly. Appraisers can use different methodologies for different purposes.
- For a sale, an owner might prefer a higher value to maximize proceeds.
- For a gift, the parties may prefer a lower valuation because the recipient will pay income tax.
- For a pledge (collateral), a higher value may allow the owner to obtain a larger loan.
Thus, each assignment sets its own objectives, which affects the scope of work and the appraiser’s fee.
Apartment Valuation Procedure: Step-by-Step
Previously, only authorized expert companies could perform valuations. Since early 2020, after the Verkhovna Rada adopted legislation abolishing such intermediaries and removing them from the Unified Appraisal Report Database, access to valuation data has become more transparent to prevent corruption schemes. Ordinary users can now view valuation information—provided they have the proper ownership documents.
Process:
- Visit the official website of the State Property Fund of Ukraine (SPFU).
- Complete the online form. By submitting all data, you confirm that you are the property owner.
- The data are sent to the Unified Database, where SPFU specialists process the information.
- The valuation is calculated based on statistical analysis of comparable properties.
- A valuation document with an individual number is generated; on its basis you receive a certificate stating the appraised value.
If you agree with the valuation, the certificate has legal force for 30 days and can be used for various transactions, including notarized agreements.
You may also engage independent experts legally authorized to perform valuations.
How an Apartment’s Value Is Determined: Core Factors
Professional valuation takes into account many aspects, including:
- Prestige of the neighborhood, which affects the price per m²
- Building height and the apartment’s floor level
- Condition of the apartment (excellent, good, satisfactory, unsatisfactory, poor), including whether and when renovation was done and at what quality level
- Local infrastructure
- Access roads and transport links
- Proximity to the city center
Every valuation is individual. For new builds, the developer’s reputation may also be considered. The appraiser delivers a written report stating the value, the validity period, and the methods applied.
Particulars of Valuing Apartments in Kyiv in 2024
To ensure a successful valuation in Kyiv, you must consider numerous factors. Kyiv is an expensive, prestigious city, so most apartments—especially in good districts and new developments—should be valued appropriately.
Prepare a complete set of ownership documents. If unsure, consult a notary.
Apply to a state or private valuation service. If using an independent appraiser, verify that they are authorized: check the State Register of Appraisers.
Help the appraiser understand the apartment’s condition and advantages: recent quality renovations, location benefits, convenient transport, nearby shops and services, etc.
Ask which methods the appraiser will use. After receiving the report, review it carefully to understand how the value was determined.
If you agree with the value, the process ends. If not, first discuss discrepancies with the appraiser; if necessary, consult another independent expert or the relevant state valuation service. You can also get a preliminary estimate using the automatic valuation tool on the SPFU website.
Who May Perform Apartment Valuations and Requirements
Only qualified specialists have the authority to value apartments and issue reports:
- Independent experts
- Appraisers of the State Property Fund of Ukraine
- Market participants licensed for valuation activities
A report may be issued only by a specialist with over two years of experience in the field. Appraisers must provide a professional certificate and a qualification license/entry in the State Register of Appraisers. You can verify their credentials on the official Register site and contact them using the listed phone number.
Documents Required to Value an Apartment
For a 2024 purchase-and-sale valuation, you typically need:
- Ownership documents (sale contract, gift deed, exchange agreement, certificate of ownership, etc.)
- BTI technical passport (from the Bureau of Technical Inventory)
- ID (passport) of the owner or the person holding a power of attorney.
For inheritance cases: the decedent’s death certificate, the heir’s passport, and documents proving kinship (birth certificate, marriage certificate, etc.)
If documents are missing or there are doubts about them, the valuation will not be performed.
When the Appraised Value Differs From Market Value
Two scenarios are common:
Appraised value below market value. No issues arise. The notary calculates taxes based on the higher amount, and the sale contract reflects the actual market price, which becomes the tax base.
Appraised value above market value. If the appraised value exceeds the contract price, taxes must be paid on the higher appraised value. You may sell at a low price or execute a gift deed (with no profit), but taxation will still reference the appraised value. If you disagree, ask the appraiser to recheck the report for errors or consult another authorized appraiser.
Validity Period of the Valuation Report
The appraiser prepares a report that must be registered in the Unified Database. The valuation is generally valid for up to six months from the valuation date and has legal force for a variety of property transactions. Once expired, you must order a new valuation. The report should clearly state its validity period starting from the valuation date; after that period, the valuation becomes invalid.
Tips for a Successful Apartment Valuation
Ensure all property documents are in order.
Choose a state body or a licensed independent expert; beware of fraud.
If using an independent appraiser, verify their certificate and registration in the State Register of Appraisers.
Present your apartment’s strengths clearly (condition, location, infrastructure) to support an appropriate value.
With proper preparation and a qualified appraiser, you’ll obtain a legally valid, well-substantiated valuation suitable for any required transaction.
