Appraisal is usually done for all properties in a specific category at the same time (mass appraisal). Normally the sales comparison method is used.
This article describes mass appraisal according to the sales comparison method, which is the most used method. There are also other methods.
Sales comparison method
In this method, the market is analyzed in order to find areas where prices are similar for comparable properties. These areas are called value zones. The value categories are analyzed separately.
Appraisal is a very complex procedure. In a very simplified way the sales comparison method can be described in the following steps:
Classification of properties
First, all properties are classified. The reason for classifying properties is that the market values differs between different types of properties.
For parcels there are 16 different value categories. For objects, there are 23. Each value category belongs to a property category.
All properties are classified into one of the value categories based on how the property is used.
You can read more about how classification is done here.
If the classification is not in line with how you actually use the property please contact your municipality to make corrections. You can do this either through a complaint or a request for correction.
Collection of market information
The appraised value shall reflect the market value. To achieve this, the market must be analysed. Therefore sales contracts and other market information are collected. This information is sorted based on value category together with information regarding each analysed property.
To get correct information about the market value all sales that did not take place in the open market, for example sales between relatives, are excluded from further analyses.
Analysis of market information
All sales, other market information and information about properties are analysed in order to determine the market value for properties in the different value categories.
In areas where sales are scarce, these are not sufficient to determine the market value. In these cases, other market information is used.
Determination of value zones and value levels
To find out how sales prices vary due to location the prices per square meter for sold properties are marked on a map. Based on this, value zone borders and value levels are determined. This is done separately for each value category.
The determined value zones are presented on value zone maps. These maps show how the value per square meter vary due to location.
You can look at the value zones in two ways:
- Value zone maps in the e-office (one map per value category)
- Printed maps in the property tax office of your municipality (one map per property category)
A value level is determined for each value zone in every value category. The value level is presented as value per square meter.
You can look at the value levels in two ways:
- Directly on the value zone maps in the e-office
- Printed value level tables in the property tax office of your municipality.
After a general appraisal, a General Appraisal Report is published for each municipality. This is an official report showing the value zones and value levels for each value category.
Calculation of appraised value
Finally, the appraised value is calculated. The formula for calculating this differs slightly between objects and parcels.
The appraised value of a parcel is calculated by multiplying the area of the parcel with the applicable value level.
Appraised value = Area (m²) * Value level (€ per m²)
The appraised value of an object is calculated by multiplying the area of the object with the applicable value level, condition coefficient, and the finished coefficient.
Appraised value of object=Area (m²) * Value level (€ per m²) * Condition coefficient* Finished coefficient
Applicable value level is determined based on the value zone and value category to which the parcel/object belongs.