The market value of land. Cadastral and market value

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The cadastral and market value of a land plot are two concepts that it is important to know about in order to navigate the sale. The first type expresses the price of the site according to the standards, which are calculated depending on the location and category of land. It is used as a regulator of land relations when concluding lease and sale transactions, as well as to calculate the amount of tax that will be paid to the state. The cadastral and market value of a land plot is assessed at least once every five years. The data obtained as a result of such an assessment is entered into the state real estate cadastre maintained by the Federal Service for State Registration, Cartography and Cadastre.

The relationship between the concepts used

Russian legislation provides for not only cadastral value, but also normative and market value. The normative one is applied in cases where the definition of the cadastral one has not been made. It is calculated in a number of cases, which are prescribed by law: when obtaining bank loans secured by land, buying out municipal and state lands, and in other cases. Calculation of the value of the land in thisIn this case, it is usually defined as 200 times the land tax rate per square meter of land area, calculated on the basis of the intended purpose, while taking into account multiplying factors and not taking into account tax benefits.

Every year, local authorities set the cost of land, recognized as normative, which can vary within 25%. The market value of land plots is usually 25% higher than the standard value. A document that serves as confirmation of the standard price for a particular plot can be obtained from the city or district committee for land management and land resources.

Features

The market value of land plots is usually determined depending on factors such as market demand and supply for land of a certain category in a particular region at the current time. In value, it should not exceed the most probable level of the purchase price of a similar territory. Changing market conditions or the target orientation of the site may affect its size. The market value of land plots is typical for the secondary market, where the resale of land areas at the disposal of private owners is carried out. The primary market, where the redemption of municipal and state lands into private ownership, recommends the use of standard value. All of these types may have certain differences. The cadastral and standard values are similar to the inventory price, while the market value is similar to the traditional demand andoffer.

Evaluation process

Estimation of the market value of the land is carried out in order to know the real price of the object. Typically, the price is formed on the basis of the territorial location of the site, market conditions, the dynamics of supply and demand, as well as the situation in the country's economy at the time of the transaction. Thanks to a comprehensive determination of all these factors, it is possible to calculate the cost of a land plot, because the appraisal company will collect the most relevant data that may be useful for an objective assessment.

Need for appraisal activities

Usually, it is advisable to contact specialized companies for assessment in a number of cases, among which the following are highlighted:

- the need for a cadastral valuation;

- if the site is supposed to be redeemed from state ownership;

- if it is necessary to transfer a contribution to the authorized capital of the enterprise;

- in the case of a mortgage or pledge;

- if necessary, determine the cost of selling the land;

- calculation of the amount of taxes paid on donations.

Division of property

Assessment of the market value of a land plot is required when dividing property. This applies to individuals and legal entities. If we are talking about individuals, then the assessment process starts when the couple divorces and is calculated taking into account the buildings located on the site. In the case of legal entities, land valuation consists of allocatingand valuation of the share of each shareholder or co-owner of the company according to the legal status of the company. Often the division of property is accompanied by litigation in court, due to which the market value of land plots can be determined many times.

When several successors enter into the inheritance, a full assessment of land plots is also made. If one of the parties does not agree with the results of the examination, then the case is referred to the court.

Determining the cost of rent

This type of assessment can come in handy quite often. In this situation, when calculating the cost of a land plot, the difference between its real value on the market and the catalyzed rental rate for territories of this type is taken as a basis. The cost of the lease right is directly dependent on the tenant's powers, encumbrances and the duration of the lease right, the rights to the property being valued by third parties, as well as the intended purpose of the land.

The market value of land plots is directly dependent on such factors as: location of territories; accessibility for vehicles; availability of communications, as well as their quantitative and qualitative composition. In addition, it is required to take into account the data of geodetic and engineering-geological studies, the importance of which is quite large, especially when planning construction work on the site.

Status on a specific date

Since the land market is characterized by a constant change in prices, the valuation is required to be made as of a certain date. The market value of land plots also varies depending on their purpose according to the papers, that is, the permitted use case. Purpose implies the most effective or probable disposal of the territory. All this is used in order to determine the cost of redemption of the land. In this case, the estimates are divided into separate territories, differing in the form and nature of land use.

Evaluation Methodology

So, before determining the cost of a land plot, you need to answer some questions:

- what is the intended purpose of the land plot, as well as what permitted use it was endowed with;

- what are the prevailing methods and types of land use in the immediate vicinity on the plots;

- what changes are coming on the land market;

- what type of land use is expected at the moment.

Evaluation of the market value of a land plot is made on the basis of certain information. This usually requires: defining the objectives of the assessment; set a specific date for the settlement; know the details of the customer; have documents that confirm the right of the owner of the site to the territory, it can be a tenant or an owner.

You also need to know:

- purpose of the assessed territory;

- permittedland use;

- type of use of the site at the moment;

- the position of the object being assessed in the territorial plan, that is, its transport accessibility and the immediate environment;

- the main uses of land in the immediate area.

In addition, there must be:

- land plan;

- information about fixing territorial boundaries;

- data on the presence of some improvements, in particular, buildings, structures, communications located on the site, as well as detailed information about them;

- data on the presence of encumbrances in the form of buildings, communications and facilities located on the site, with detailed information about them.

The market value of land plots is calculated taking into account many nuances. With an accurate assessment under the guidance of experienced professionals, any financial transaction with the land can be safely carried out.

Factors that affect the score

Different types of land plots are influenced by the same factors when it comes to their valuation: location, external factors, market conditions, intended use and the likelihood of its change, the possible profit received from its use. What matters is the estimated value of the latter.

The assessment of the market value of a land plot is made as of a certain date. Over time, this figure may change. It is recommended that the assessment bebasis for maximum efficiency. That is, when conducting research, experts use the assumption of the reasonableness of using this object in accordance with the law, as well as financial and physical realities. It turns out that as a result of the assessment, not the average cost is calculated, but the maximum. Sometimes a conditional, but justified, division of an object into a number of parts is allowed, which are characterized by different types, forms, and other features. Often the result of research differs from the expected one due to the fact that the current type of use does not match the maximum effective one. This concept needs to be de alt with.

Maximum use

In the event that the market value of a land plot is established, the following factors must be taken into account:

- intended purpose, as well as the availability of permissions for a certain type of use;

- use of the site after the fact;

- preferred land use type in the current county;

- forecasts regarding price changes for similar sections.

Conclusions

The assessment process takes into account the average cost of territories in the study area, the availability of transport networks, the absence or presence of buildings, engineering networks on the land, the environmental situation, the remoteness of infrastructure, and others. For agricultural land, it is required to evaluate the actual crop yield, production costs, costsales of products in the region, as well as a number of equally significant factors. Other types of land plots are evaluated in the same way.