In March 2024, the Real Estate Finance Oversight Commission (REFOC) announced that it had adjusted property appraisal fees to align with what it described as current “economic conditions,” and to take into account small- and medium-sized loans. The REFOC also indicated that it is working on revising its property appraisal guidance manual and finalising a memorandum of understanding with the Central Bank of Syria.

Real estate finance refers to the financing of the purchase, construction, renovation, or improvement of residential and service facilities, secured by a lien on the property, a mortgage, or any other security acceptable to the financier. Under the provisions of Law No. 39 of 2009, the REFOC was established to regulate and oversee the financing of the real estate sector, protect the rights of the various parties involved in the financing process, and improve the performance and efficiency of those working in this sector. The commission has a legal personality and financial and administrative independence and is chaired by the Minister of Finance. In March 2021, the Prime Minister restructured the authority’s board of directors to enhance its role.

REFOC is responsible for supervising and regulating the work of property appraisal experts, and issuing annual lists of licensed experts practising the profession. According to the commission’s data for 2024, there are 501 licensed property appraisal experts. Law No. 8 of 2012, which governs the property appraisal profession and its practice requirements, defines a property appraisal expert as a person certified in property valuation by the authority. To practise as a property appraisal expert, one must hold a university degree in economics, law, civil engineering, or architecture, and pass a central examination conducted by the authority. The property appraisal expert’s licence is granted for one year and is renewable, provided that the expert continues training and pays the necessary fees.

Law No. 8 of 2012 mandates the use of property appraisal experts in all financing transactions secured by real estate, in accordance with prevailing laws, notably Law No. 15 of 2012, which pertains to the establishment of real estate finance companies and real estate refinancing companies. Consequently, the scope of work for property appraisal experts remains limited, primarily linked to loan transactions through banks with real estate collateral, or real estate loans for purchasing, finishing, or renovating properties.

A property appraisal expert assesses whether the real estate collateral is suitable for loan repayment and determines the method of loan disbursement in instalments, based on construction progress. Typically, three property appraisal experts collaborate on a single appraisal report for borrowing purposes, inspecting the property and submitting their report to the bank.

Law No. 8 of 2012 specifies the role of property appraisal experts in estimating the value of real estate for purposes defined by regulatory decisions, though it does not specify the issuing authority of those regulatory decisions. However, the law implies these regulatory decisions come from official bodies relevant to the expert’s work, including public, joint, and cooperative sectors, as well as banks. The expert performs their duties exclusively upon written assignment from the relevant entity, and their report can only be used for the specified purpose. The expert preparing the report must not be affiliated with the financing institution.

Property appraisals can also be used for purposes such as insuring residential, commercial, and tourist properties, insuring against earthquakes and disasters, and other situations like inheritance settlements, partnership dissolutions, and real estate transactions including buying, selling, investing, and renting. In these cases, entities such as insurance and reinsurance companies, savings institutions, foreign companies, and joint ventures can engage a property appraisal expert. The expert prepares their report exclusively based on a written request from the interested party, using a specific, printed official form.

Amendment of Property Appraisal Fees

In March, Intisar Yassine, the Director General of REFOC, told the semi-official newspaper Al-Watan that the commission had reduced property valuation fees by half for loans secured by real estate collateral worth up to SYP 100 million. This measure aims to ease the burden on small real estate borrowers.

For larger loans, the fees for property appraisal experts can reach up to SYP 500,000 for industrial or tourism facilities, SYP 250,000 for commercial, residential, or artisanal properties within cities, and SYP 300,000 for such properties outside cities. However, experts often charge more, especially if the request comes from the private sector or individuals.

In all cases, 10 percent of the fees earned by experts are deducted as income tax for assessments and valuations conducted with the public sector, joint ventures, and cooperatives, as stipulated by Law No. 8 of 2012. Property appraisal experts and companies are subject to income tax for appraisals and valuations conducted with other entities under the provisions of Income Tax Law No. 34 of 2003 and its amendments.

Amendment of the Guidance Manual

Ms Yassin mentioned that REFOC is currently considering amendments to “the Property Appraisal Guidance Manual and the National Property Appraisal Standards and the Property Appraisal for Insurance Purposes.” This is the primary manual adopted by the authority to define the concept, principles, standards, and methods of property appraisal, as well as the procedures and mechanisms for the work of property appraisal experts. The manual includes property appraisal standards, insurance appraisal standards, and sample appraisal reports, based on the provisions of Law 8 of 2012.

No information is available regarding the memorandum of understanding between the Real Estate Finance Authority and the Central Bank of Syria.