If you are planning to sell your property, you are required to assess the value of your property as the first step. There are many ways in which you can calculate the assessed value of the piece of property. In this answer, I will explain my favourite method, i.e. Component Approach.
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How to Find Out Assessed Value of PropertyUnder the component approach, we access the value of the building (construction cost) and the value of the land separately and add the values to get a good estimate of the property price.
To access land price: You can calculate the land value from the instances of sale of built-up properties in the area, considering floor area ratio, zone use and plot coverage, frontage on the main road, and the shape.
If you live in a city where urban land tax is collected, you can take the value of the land assessed by urban-local authorities as a guide to finding the land value. The price fixed by housing boards or development authorities while offering the sites for sale can also be taken into consideration. For land parcels that are located on the city’s periphery, you can also consider the development potential as the guidelines value.
To assess building cost: The value of the building is arrived at by working out the reproduction cost and assessing the present value by factoring in depreciation.
Total cost = Value of Plot + Value of building
Total cost = Value of plot + (Total area x 10 percent of reproduction cost)
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Other Methods: How to Find the Assessed Value of A Property Sales Comparison ApproachIn the sales comparison method, the value is assessed based on the price that similar properties got, when sold recently in the same market.
Cost ApproachThis approach is based on the assumption that a reasonable homebuyer won’t pay more for an existing improved property than the price to purchase a comparable lot and build a comparable building. Here, you are required to assess the cost to rebuild a similar building and then calculate a fair price after keeping the depreciation in mind.
How to Calculate Market Value of Property?
Read more:
How to find the market value of property in Hyderabad?
How to find market value of land in Tamil Nadu?
How to calculate the market value of property in Mumbai?
I hope now you know how to find the assessed value of a property.
How to find out assessed value of property?
Jai
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2022-06-01T18:35:24+00:00 2022-06-02T19:02:34+00:00Comment
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