Valuation for tax purposes usually means the process of determining the value of real estate for tax payment by individuals when notarial transactions are carried out. The results of such tax valuation are entered into the database of the State Property Fund of Ukraine. The document issued as a result of the appraiser’s work is assigned a special registration number.
In practice, valuation for a notary is most often needed for sale, gift, or inheritance registration. However, it is important to understand that valuation for tax purposes is not just a formality for a notary. It is an official procedure with its own rules, checks, and limitations.
Specific Features of Tax Valuation
When we are talking specifically about valuation for a notary or valuation for tax purposes, the main feature is that such valuation is registered in the Unified Database of Appraisal Reports of the State Property Fund of Ukraine. That is why it should not be confused with other types of valuation, for example for court, accounting, or division of property. You can read more about which appraisal reports must actually be registered here: property appraisals which must be registered in the SPFU database.
At the same time, not every situation necessarily requires a full appraisal report. In some cases, a certificate from the Unified Database can be used instead. We wrote about this separately here: certificate instead of an expert valuation: how not to overpay the notary.
There is another important nuance that many people only discover when ordering a valuation. For tax purposes, the value of real estate cannot be determined arbitrarily. The system works in such a way that the amount stated in the report must fall within a certain range relative to the value automatically calculated by the database. This is exactly why a common misunderstanding arises: many clients believe that the appraiser must automatically set the value at minus 25% and reduce the price as much as possible. In reality, this is not how it works.
The allowed range is not a right to automatically undervalue the property. It is a technical corridor within which the market value may fall. If the real estate is in fact worth an amount close to the average market level, then that is the value that should be stated in the report. If the figures are intentionally manipulated, this can raise questions not only for the appraiser but also for the client. In problematic cases, this may lead to very unpleasant consequences, including attention from law enforcement authorities if valuation data was deliberately falsified and taxes were underpaid.
In other words, tax valuation must correspond to the real market. This approach is safer for the appraiser, for the client, and for the notarial procedure as a whole. Of course, no one is interested in an overstated value, but an obvious understatement can still backfire.
What Documents Are Needed for the Valuation
When valuation for a notary is ordered, it is convenient to divide the documents into two large groups: documents for the real estate itself and documents for the people involved in the transaction or registration. This division is simple, but in practice it helps a lot not to miss anything.
Documents for the Real Estate
In most cases, for valuation for tax purposes of an apartment, house, or premises, you need title documents and a technical passport.
If you do not have a technical passport or if it was issued a long time ago, this issue deserves special attention. It is better to clarify right away with the notary who will handle your particular transaction or inheritance registration whether a technical passport is required in your case. And if it is required, whether the existing document is sufficient. It is worth stressing once again that this question should be asked specifically to the notary you have chosen, because different notaries may have different views on this issue.
This matters not only as a formality. After a new technical passport is prepared, the area of the property often changes slightly. In the past, measurements were often made in a much simpler way, using ordinary tape measures, and the margin of error could be greater. Today, property measurements are carried out more accurately, including with modern laser distance meters, so the total or living area may differ slightly from what was stated in older documents.
It is also worth taking into account that the approach to measuring balconies, loggias, terraces, and other auxiliary parts of real estate has changed over time. Because of this, an old technical passport and a new one may sometimes show different figures even when the owner has not added anything or altered the property in any way. And if there has been any redevelopment in the apartment or house, even a minor one, the new measurement will almost certainly result in a change of area.
Therefore, if the notary requires a new technical passport, it is better to order the tax valuation only after that. Otherwise, it may happen that the valuation is prepared using one set of characteristics, while the updated documents later show different ones. As a result, you may lose time and money on reissuing the documents.
As for a land plot, the logic is similar: a title document is required, but its form may vary. It may be a state act, an agreement, a certificate, an extract, or another document depending on the specific situation. The important thing is that the documents clearly indicate the address or location of the land plot, its area, designated use, and cadastral number.
If all this information is present in the ownership document, that is often enough. But if part of the information is missing, especially the cadastral number or the characteristics of the land plot, then you will additionally need an extract from the State Land Cadastre.
Documents for the People Involved
It is also important to understand who can actually act as the client. As a general rule, the client for a valuation may be either the owner of the property or a person who possesses the property on legal grounds. You can read more about this here: who can be the customer of property evaluation.
If the matter concerns the sale or gifting of real estate, a document related to the owner is usually required. In practice, the owner’s tax number is most often sufficient.
If inheritance is being registered, then it is important to show the connection between the deceased person and the heir. Usually, this means providing a death certificate or a document confirming the opening of the inheritance case, documents proving family relationship or a will, as well as the heir’s tax number.
If inheritance is handled not through a notary but through court, then the procedure will be different. In such cases, there may be other requirements for the purpose of the valuation itself, for the wording of the assignment, and for the package of documents. In this situation, it is better to rely not on standard valuation for a notary, but on valuation for court.
How Much Does Valuation for a Notary Cost
It is also worth saying a few words about the cost of the service. It does not depend on the abstract label “tax valuation,” but on the specific type of property. That is why we indicate prices not in a general article, but on the relevant service page: for apartments, for residential houses, for premises, for land plots, and for garages.
If you need not only to order a valuation for tax purposes, but also to understand in advance the amount of related taxes in case of sale, gift, or inheritance, this article may also be useful: taxes on sale, gift, and inheritance of real estate in Ukraine.
