Appraisal is carried out with the aim to determine an appraised value that reflects the market value. The appraised value is primarily used as a base for property tax.
This article explains why appraisal is carried out.
Many countries in the world have an official value for properties which is determined through an official nation-wide appraisal. The official values are mainly used for taxation purposes, but they are often also used for other purposes, such as credit rating, a basis for valuation of collateral for loans, insurance purposes etc.
In Kosovo the appraised value will primarily be used as a base for property tax. In the long term an official appraised value, together with verified sales data will increase transparency in the property market. It can also lead to a more efficient credit market.
Appraisal is carried out to find an appraised value that reflects the market value. The purpose of this is to make the property tax more fair. When property tax is market value based the tax will be higher on an expensive property in a popular area than on a less expensive property in a less popular area.