Types of Value

Types of Value

1. Accommodation value

2. Annual value

3. Book value

4. Distress value

5. Market value

6. Monopoly value

7. Potential value

8. Replacement value

9. Salvage value

10. Scarp value

11. Sentimental value

12. Speculative value

Accommodation value

The value of surrounding agricultural land of the city is to be converted into accommodation. For this owner of the land has to obtain permission from competent authority.

Accommodation value is greater than the value of agricultural land but less than value of building land.

Annual value

The local authority has to decide the annual value of the property so that taxes can be calculated on that basis. Such annual value of the property has to be fixed by observing principles of rating valuation.

Book value

Book value is the value of a property shown in account book. The book value is obtained after deducting the depreciation from original cost.

The book value of the property = original cost at a particular year – Amount of depreciation upto previous year.

Book value = scrap value at the end of life of the property.

Distress value

A property is said to have distress value when it can fetch lower value than the market value. The distress value is developed due to various reasons such as

1. Fear of war, riots, earthquake, etc.

2. Financial difficulties of seller

3. Intention to favour purchaser

Market vale

Market value of property is amount which may be obtained at any time from open market, when property is for sale. The market value of the property changes from time to time as per demand and supply.

Potential value

When property is developed in its most advantageous manner, the property fetches more value. This value is termed as its potential value. The agriculture land on the outskirts of city has potential building value.

Replacement value

The cost of replacing property either fully or partly is known as replacement value.

Scrap value

Scrap value is also known as junk value or demolition value. Scarp value is a value of dismantled materials of a built up property at the end of useful life of the property. The property is absolutely useless at the end of life of the property and can be broken into suitable unit for disposal. The amount received from sell of such units is called as scarp value of the property.

Salvage value

At the end of useful life of the property, the property is to be discarded and the built up property is sold without being dismantled into pieces. This value of property is known as salvage value.