What Is the Definition of Land Value?
Land value is the measure of how much a plot of land is worth, not counting any buildings but such as enhancements such as drainage. Part of what is taxed is the value of the property, in addition to, If a landowner pays taxes on her estate.
Identification
Real estate’s market value is your cost to which a inquisitive buyer and seller could agree. This is only a quote. The cost for which a piece of farmland or a undeveloped plot of city property sells could be higher or lower than the fair market value.
Features
To determine fair market value, an appraiser or property assessor can use the comparable-property strategy. Start looking for similar parts of land which have sold and use these prices as a measure of what the piece of property would go for. Reasonable value is not represented by some sales. If the proprietor was in a hurry to sell to raise money or in the event the buyer and seller agreed to an additional compensation aside from the selling price, the selling price could be skewed from the legitimate market value.
Alternatives
The income approach can be also used by appraisers to measuring property value, according to the IRS. This bases on how much income a property — farmland, for instance — generates for the proprietor the value. A third option,”cost value,” looks for similar plots which are on the industry.
Factors
Other factors which may impact the land value, as stated by the California Department of General Services, comprise water rights, timber rights and mineral rights on the property. Appraisers should also think of limitations on the usage of the property, or easements, zoning and toxic hazards.
Possible
Landowners can use a conservation easement to decrease their property taxes, the Northern California Regional Land Trust states. A conservation easement limits the owner’s ability to develop or subdivide the property, and that of all future owners as well, though the amount of limitation will change with individual easements. The trust states that owners may claim a tax deduction to the reduced price of the property and that the estate tax on the property are also lower.