Importance of Property Valuation
Property valuation helps an
organization or an individual know the worth of the property. The fair price of
a land, factory, or a building can be estimated through the valuation of a
property. Property valuation of includes the estimation of a brand,
copyright, intellectual property related rights, goodwill and
company performance related to marketing and promotions.
There are numerous reasons why a property is being valued. Some of them are mentioned below:
- Buying or selling of property: Valuation of property is important when buying or selling of property. Even if an individual wishes to rent his property, valuation of property becomes important. The rent of a property is usually 6–10% of the estimated price of property.
- To mortgage a property: The valuation of property is important when a buyer wishes to seek loan against the security of property valuation is also done in case a loan for construction of a building is required.
- For taxation purpose: Valuation of property is important when calculating the tax on property. Taxes include wealth tax, municipal tax, property tax, vacant land tax, ground rent tax etc, which an individual has to pay to various government departments.
- For transfer of property: In case a person wishes to transfer his property, he will need to estimate the value of property. The stamp duty is calculated on the basis of the worth of property.
- Compulsory Acquisition: In case an individual or an organization declares itself bankrupt and a compulsory acquisition or auctioning off the property is done, in such case the valuation of a property is important.
Article written by
PriscillahMunangatire