The cadastral and market value of a land plot are two concepts that are important to be aware of in order to navigate the sale. The first type expresses the price of the plot 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 for calculating the amount of tax that will be paid to the state. The cadastral and market value of the land is estimated 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 of the concepts used
Russian legislation provides for not only cadastral value, but also regulatory and market value . The normative is applied in cases where the cadastral definition is not made. It is calculated in a number of cases that are prescribed by law: when obtaining bank loans against land collateral, redemption of municipal and state lands, and in other cases. Calculation of the value of a land plot in this case is usually defined as a 200-fold land tax rate per square meter of land area, calculated on the basis of the intended purpose, while taking into account increasing coefficients and not taking into account tax benefits.
Every year, local authorities establish the value of land recognized as normative, which can vary within 25%. The market value of land is usually 25% higher than the normative. A document that serves as confirmation of the normative 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 is usually determined depending on factors such as market demand and supply of 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. Changes in market conditions or the target orientation of the site may affect its size. The market value of land is characteristic of the secondary market, which is the resale of land owned by private owners. The primary market, where municipal and state lands are redeemed into private property, recommends applying the standard cost. All of these species may have certain differences. The cadastral and regulatory value are similar to the price of inventory, and the market - with traditional demand and supply.
Assessment process
Assessment 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 economy at the time of the transaction. Thanks to a comprehensive definition of all these factors, it is possible to calculate the value of the land, because the appraisal company will collect the most relevant data that can be useful for an objective assessment.
The need for valuation
Typically, contacting specialized companies for an assessment is advisable in a number of cases, among which are highlighted:
- the need for cadastral valuation;
- if the plot is supposed to be redeemed from state property;
- if necessary, contributions to the authorized capital of the enterprise;
- in the case of a mortgage or collateral;
- if necessary, determine the sale price of the land;
- calculation of the amount of taxes paid upon gift.
Property division
Assessment of the market value of the land is necessary in the division of property. It is customary to refer to individuals and legal entities. If we are talking about individuals, 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 the allocation and valuation of the shares 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, because of which the market value of land can be determined many times.
Upon the inheritance of several successors, a full assessment of land plots is also carried out . If one of the parties does not agree with the results of the examination, the case will be referred to court.
Determining the cost of rent
This type of assessment can come in handy quite often. In this situation, when calculating the value of a land plot, the difference between its real value in the market and the catalyzed rental rate for this type of territory is taken as the basis. The cost of the lease right is directly dependent on the lease powers, encumbrances and the duration of the lease right, rights to the evaluated object of third parties, as well as the intended purpose of the land.
The market value of land is directly dependent on factors such as: location of territories; accessibility for vehicles; the availability of communications, as well as their quantitative and qualitative composition. In addition, it is necessary to take into account the data of geodetic and engineering-geological studies, the significance of which is quite large, especially when planning construction work on the site.
Status for a specific date
Since the land market is characterized by a constant change in prices, an assessment is required to be made as of a certain date. The market value of the land plots varies and depending on their purpose for the securities, that is, the permitted use case. Destination involves 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, estimates can be divided into separate territories that differ in the form and nature of land use.
Assessment Methodology
So, before determining the value of the land, you need to give answers to some questions:
- what is the purpose of the land plot, as well as what authorized use has been allocated to it;
- what are the predominant methods and types of land use in the immediate vicinity of the plots;
- what changes are to be made on the land market;
- what type of use of the land is supposed at the moment.
Assessment of the market value of the land is based on certain information. Usually this requires: to determine the objectives of the assessment; Set a specific settlement date know customer details; to have documents that serve as confirmation of the right of the owner of the site to the territory, it can be a tenant or owner.
You also need to know:
- intended use of the evaluated territory;
- permitted use of the land;
- type of use of the site at the moment;
- the position of the evaluated object in the territorial plan, that is, its transport accessibility and immediate surroundings;
- The main ways to use land in the immediate vicinity.
In addition, there should be:
- land plot plan;
- information on the consolidation of territorial borders;
- data on the presence of any 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 structures located on the site, with a detailed indication of information about them.
The market value of land is calculated taking into account many nuances. When conducting an accurate assessment under the guidance of experienced professionals, any financial transaction can be safely carried out with the ground.
Factors That Affect Assessment
Different types of land are influenced by the same factors when it comes to their assessment: location, external factors, market conditions, purpose and probability of its change, possible profits from its use. The estimated value of the latter matters.
Assessment of the market value of the land is made as of a certain date. Over time, this indicator may change. An assessment is recommended based on the most efficient use. 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, the average cost is calculated, but the maximum. Sometimes a conditional, but justified division of an object into a number of parts, which are characterized by different types, forms, as well as other features, is allowed. Often the research result differs from the expected one due to the fact that the current type of use does not coincide with the most effective one. This concept needs to be dealt with.
The most effective use
In the event that the market value of a land plot is established, the following factors must be taken into account:
- purpose, as well as the availability of permits for a certain type of use;
- use of the site in fact;
- the preferred type of land use in the current district;
- forecasts regarding price changes for such sites.
conclusions
The assessment process takes into account the average cost of the territories in the study area, the availability of transport networks, the absence or presence of buildings, utility networks on the land plot, the environmental situation, the remoteness of the infrastructure, and others. For agricultural land, it is required to evaluate the actual crop yield, production costs, cost of sales in the region, as well as a number of no less significant factors. Other types of land are valued in the same way.