Calculating land value can be done by using various methods, including guidance value, land value, as well as the belting method. All of these provide a realistic basis for determining land value.
A study of land value by city based on the rate per square foot and the percentage annual growth is both interesting and important.
The comparative method is, as its name implies, comparative. If there is an upmarket residential area within a city, and 2 or 3 apartments have sold for Rs 50 lakhs each, this becomes the new norm for the asking price of a home within that area. Due to a few apartments selling at higher prices, similar apartments are also priced higher.
A development method is when new development in a locality increases the value of all properties in the locality. There are several cases where the construction of an expressway promotes the value of nearby properties.
Land and building method of calculating property value is a little complex. A building’s assessment and the land on which it stands must be performed separately.
A belting method is a unique method of determining the value of land in an urban area. Using the belting method, a plot of land is divided into belts based on its proximity to a main road.
As part of the guidance value there are generally rates which are set by the central government and the state government for setting the value of land and property in an area. This is referred to as the circle value and may be more or less than existing rates prevalent in the region.
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