The regular evaluation of your land is an important process in the long-term maintenance of the property. Basically, this type of assessment will help you keep up to date with the exact value of the investment. The information is also critical in managing property tax responsibilities correctly. In addition, the valuation can be fundamental in helping you determine the best way to develop the land for maximum profitability. You should hire a professional expert for statutory and evaluation to ensure that the report can withstand legal scrutiny. However, it is important to understand the process so that you can gain the most benefits from the process.
Considerations for Valuing Land
The statutory land value is determined by examining aspects that affect the potential profitability of the property. The most important consideration during this process is the performance of the general property market. If the real estate sector is doing well and land is appreciating, your property will have more value. The valuing expert will examine the purchase interest of your land type in the local market and take into account the feedback from land vendors and investors. Additionally, the land value will be affected by the zoning under current planning schemes, and any constraints in terms of accessibility or unfavourable physical attributes can lower the property worth.
Valuing Rural Land
If your land is classified as rural in the local planning schemes, it will be valued as an unimproved property. Generally, when valuing this land, the aim is to determine the potential purchase price for the natural undisturbed land. This type of statutory assessment does not take into account any developmental approvals and even land leases. Therefore, the value of your land might be rated lower. You should discuss this aspect with the assessment expert. On the other hand, the potential land taxes for property that is rated as unimproved rural land are lower, and this can be a good long-term benefit.
Valuing Non-Rural Land
If your property is zoned in a non-rural sector or even rural residential, you will be subject to valuation of the actual monetary value of the improved land. This means that the assessment expert will account for any improvements that have been performed. For instance, aspects such as installation of retaining walls, clearing vegetation, setting up of drainage and remediation of contaminated land will be considered. The improvements will increase the value of the land, but the potential taxation will also be higher. Therefore, check if you are eligible for deductions for the cost of site improvements.
For more information, talk to a professional like Ferrier Hodgson.Read More