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Valuation Of Building

Valuation is the technique of estimation or determining the fair price or value of property such as building, a factory, other engineering structures of various types, land etc. By valuation the present value of a property is defined. The present value of property may be decided by its selling price, or income or rent it may fetch. The value of property depends on its structure, life, maintenance, location, bank interest, etc.

Click Here To Download Guidelines For Valuation Of Immovable Properties by C.P.W.D.

Purpose Of Valuation:
  • Buying or selling property: when it is required to buy or to sell a property, its valuation is required.

  • Taxation: To assess the tax of property its valuation is required. Taxes may be municipal tax, wealth tax, property tax, etc., and all taxes are fixed on the valuation of the property.

  • Rent fixation: in order to determine the rent of a property, valuation is required. Rent is usually fixed on certain percentage of valuation (6% to 10% of the valuation).
Methods Of Valuation:
Valuation of a property may be prepared by different methods. The appropriate application of a
method of valuation depends on the nature of the property as well as availability of reliable data.
When the value arrived at by different methods are wide apart and judgment cannot fix with
reasonable certainty which out of them is close to the more accurate market value, an average of
two or more than two methods of valuation is applicable.

Six Methods of Valuation
  1. Rental Method of Valuation
  2. Direct Comparisons of the capital value
  3. Valuation based on the profit
  4. Valuation based on the cost
  5. Development method of Valuation
  6. Depreciation method of Valuation
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