What is Valuation ?

 Valuation:-

Valuation

Valuation is the procedure of determining the fair market value of properties such as land & building, factories, and other engineering structures of several categories. The fair market value is estimated by summation of a certain percentage of the government rate with a certain percentage of the fair market rate.

Usually, 30 % of the Government rate and 70 % of the commercial rate are taken to determine the fair market rate. But the rate of percentage varies with the policy of different banks and finances, etc.

Valuation Depends on the following aspect:-

• Nature of the building.
• Site.
• Building structure and durability.
• The quality of the materials used in construction.
• Coverage Of building.
• Type of road connected to the properties.

Purposes Of Valuation:-

• Purchasing and Selling Property
• To evaluate the tax of the property. The taxes could be municipal tax, wealth tax,
  property tax, etc.
• To estimate the rent of the property. Usually, the rent is fixed on the figure of valuation which is 6 % to 10 % of the valuation.
• For the security of loans and mortgages.
• Compensation is paid to the property owner when it is acquired by the law of the Government.
• For property insurance, betterment charges.