What is Land Appraisal?
Land appraisal, or central land valuation, refers to the central price of land set by the government. Each announcement of the central land price will have an effective period of no more than four years. The Property Valuation Division of The Treasury Department, is in charge of setting and announcing the central price.
The latest Thailand land valuation announced for 2021-2022 still refers to the 2016-2020 central price to remedy the negative impact of the COVID-19 pandemic and subsequent recession to affected people and businesses. The most expensive land valuation in Bangkok are properties located in the Silom, Ploenjit, Phraram 1, and Witthayu areas.
What is land appraisal useful for?
Central prices are announced mainly to enable the government to ease calculating taxes such as income tax, property tax, specific business tax, and stamp duty for registration of rights and juristic acts related to real estate.
How is land appraisal value different from market value?
One of their major differences is that land appraisal value is usually lower than market value, normally by approximately 20-40% depending on the area where land is being appraised or the particular period when it is being appraised. On the other hand, market value is more up-to-date than the land appraisal value set by the government, especially since land value tends to fluctuate when there are news or updates regarding a new subway line, new expressway, new road, or new town in a particular location. Additionally, a land appraisal is done every four years, which is why appraisal value adjusts slower than market value. That means, as market value fluctuates based on the supply and demand on any given period, land appraisal value remains unchanged until the next appraisal period.
Given this, many people may wonder, “Why not just refer to the market price instead of the land appraisal value?” That’s because although the market price reflects the actual value of the land and, therefore, reduces risk in investment, the downside of using only the market value is that determining a land’s price is not easy. It requires a lot of spending on things, such as hiring an analyst or measuring an area to determine a land’s final price.
Therefore, the government’s land appraisal is useful since the value is set by the government, which means anybody can easily access the appraisal value data. In addition, the price survey conducted by the government is done with a clear procedure, that is, by analyzing market history, studying the land condition, and surveying external factors affecting the price estimation, such as annual flood risk or regional pollution. These are just some of the few factors that can be accounted for in the estimation.
Currently, land investment is one of the few viable investment options for people who have sufficient money and are looking to profit in the future. Land appraisal is an effective tool to determine what direction the land market is going to take — something that investors should pay close attention to. They should also look into other factors, such as transportation access or surrounding facilities to truly understand the market before beginning the buying and/or selling process
You can learn more about Thailand land, houses, and real estate at DDproperty.com, Thailand’s number one real estate marketplace site. We’ve compiled information on buying, selling, and renting notices of new housing projects and second-hand homes all over the country. We are also the primary source of knowledge for buying, selling, and renting homes, helping those who are looking for a home make the best decision.