What you need to know about the standard land value

Standard land value - what is it?

The standard land value is an important reference point for determining the value of land and property prices. The legal basis is § 196 of the Building Code.

This describes the standard land value as the average site value for land in a particular area. These areas, also called guideline value zones, are not grouped arbitrarily but must, according to the law, correspond in their type and degree of use. The possible extent of these zones is not firmly defined by law. A guide value zone may consist of a single street, a part of a town or even entire villages.

Different plots of land located in such a standard value zone therefore all have the same standard land value. In simple terms, the standard land value is the average value of a square metre of land that is used to determine the individual market value of a plot of land.

What standard land values are there?

There is only one type of standard land value, although values vary from area to area. It is determined in a standardised procedure regardless of the location of the standard value zone.

To be distinguished from the standard land value is the land value, which is sometimes erroneously used synonymously. Despite the linguistic similarity, however, the terms differ significantly in their meaning. While the standard land value is a calculation factor, the land value is the individual total value of the property. In this respect, the standard land value serves to determine the concrete land value.

Another way to determine the value of a property or a plot of land is the so-called comparative value method. In this procedure, the value is derived from the market value of other properties and land with similar characteristics. If the comparative value method cannot be used, for example, because there are too few comparable properties, the calculation is often made with the help of the standard land value.

Who determines the standard land value?

The standard land values have been determined in Germany since 1960 by an expert committee for land values in a standardised procedure. This independent body is made up of real estate experts and was founded to provide more transparency in the real estate market. The law stipulates that the standard land values must be determined at least at the end of every second calendar year. However, the laws of individual federal states may deviate from this so that the determination can also take place more frequently.

The official collection of purchase prices serves as the basis for determining the standard land value within a standard value zone. This contains real purchase prices of land and real estate in the respective area. An average value is formed from these prices.

However, not only the standard ground value but also the individual characteristics of the property are decisive for determining the value of a property. They can increase or decrease the standard land value of a property.

Characteristics that influence the value are

• Property size

• Shape of plot

• Location and connection to the existing infrastructure

• Soil properties

• Type of planting

• Degree of development

• Possibilities for development

• Type of building use (apartment building, farmland, commercial building, etc.)

For property owners and prospective buyers, these factors and their influence on the final market value are often difficult to assess. Therefore, it is advisable to consult an experienced real estate agent who can determine the value of a property realistically and soundly.

How is the standard land value calculated?

Since the standard land value is an officially determined average value, property owners do not need to calculate it. However, it plays a decisive role in calculating the land value of a property. The land value can be calculated with the following simple formula:

Land value (in €) = standard land value (in € per sqm) x land area (in sqm)

A plot of land with a standard land value of € 800 and 200 square metres would thus have a land value of € 160,000. However, as described in the previous section, the real market value of a property may differ due to individual characteristics. Therefore, the land value should always be understood as a guide only.

Where can I find out the standard land value?

The standard land values are recorded by the land valuation committee in the so-called standard land value maps or standard land value tables. According to the law, the expert committee is obliged to publish the determined values and inform the responsible tax office. Anyone is entitled to request information about the standard land values - regardless of whether they live in the respective standard value zone or not. As a rule, oral information from the tax office is free of charge. Written information, on the other hand, may be subject to a charge. More direct access to the standard land values can be obtained via the internet. Often the standard land value maps are available on the homepage of the responsible land registry and surveying office.

Summary: What you should know about standard land values

The law stipulates that standard land values in Germany are determined every two years by the expert committee for land values. The standard land value is the average value for one square metre of land in a defined area, the so-called standard value zone. It plays a key role in determining the individual value of the property, the land value. For this purpose, the standard land value is multiplied by the land area in square metres.

However, the land value ultimately determined from this only serves as a reference value because numerous factors such as the location, the size of the plot and its accessibility can considerably influence the actual value of a plot. For this reason, the valuation of building land must always be carried out individually and should be carried out by an experienced real estate agent. The team of experts at Engel & Völkers will be happy to assist you in this matter and will determine the value of your property or plot of land competently and transparently. We look forward to hearing from you!

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