Land Valuation in Uganda
Land Valuation in Uganda : Land valuation refers to the procedure of analyzing land to determine the exact current market value.
Carrying out valuation of land comes with various benefits and this helps in the following ways
- Know how much you can resell the land
- How much money you can acquire as a loan using the land as collateral
- Helps in calculation of taxes in cases of payment of stamp duty to tax authorities
- Calculation of lease value.
For starters, we have to understand the professionals involved in the valuation of land, factors to put into consideration during valuation, methods used in land valuation, tips to prepare for valuation of later and steps of land valuation and the cost of valuation of land.
Professionals who conduct land valuation
The following professional conduct land valuation.
- Land Valuer – land or property value is a professional responsible for estimating the market value of land for the benefit of the landowners
- Surveyor – land surveyors are professionals in charge of determining and updating land boundaries and measurements.
Factors considered during land valuation
There are several factors to be considered when carrying out land valuation
Methods of valuation of land
Location of the land
When it comes to land ownership, location is everything. As such the value of property in a city such as Kampala has more value in comparison to properties in rural area or a suburb of the city.
Also, a property touching tarmac or near an industry, a school or a major development will definitely be of high value compared to one in an area without developments.
Type of Land
There are main types of land such as residential, commercial or agricultural. In most cases, commercial land is of high value due to the income – generating factor in comparison to agricultural land.
Therefore, before conducting a valuation on land it is recommended to classify it
Tips to prepare your land for valuation
Different size of land have varying valuations, however in some cases, an eighth – acre plot will be of higher value than an acre or more depending on the type of land, location and usage. Therefore, do not fall into the temptation of assuming that the valuation of a big chuck of land can be higher than a smaller piece. The value of land highly depends on the land itself and the developments on the land.
Amenities on the land
Availability of amenities on the land has a direct impact on the valuation a developing area with schools, hospitals, markets, water and power supply will have a higher valuation.
Accessibility
The value of land also depends on its accessibility, if a plot of land is not easily accessible or if the access road is not wide enough, it will be valued lower as compare to a more accessible one.
Floor Space Index (FSI)
Basically, this the total floor area of a building that can be built on the land during development, the value of land also depends on the total floor area of the building that can be built on the plot.
Soil Type
Soil type is another factor considered during valuation, commonly it is referred to as soil bearing capacity. This directly affects the cost of building foundation where a good soil does not cost much while poor ones require more resources during development.
Therefore, land with good soil bearing capacity will be priced higher.
Environmental Factors
Several factors such as erosion, flooding, landslide and other adverse environmental factors are put into consideration when calculating the value of land
Special advantages on the land
If the land has special advantages because of its location or any other reason, they are also put into consideration during the valuation of land.
Methods of Valuation of Land
There are various methods used to conduct the valuation of land and they are as discussed below
- Comparative
This is the most common method in most areas where the value of land is done by comparing it with the current land selling prices around an area, it is more practical in an area where prices of land are easily available due to ongoing selling and purchase of land properties.
- Development
This focuses on the potential of land in the near future for example the possibility of building flats, apartments, industries, upcoming road infrastructures in the area among others. The land valuer appraises the land using its potential
- Belting
This method values the land based on its proximity to the main road commonly known as depth of land, the close the land is to the main road, the higher it is valued at and this is what belting means. The main disadvantage with belting valuation is that land far from the road is valued low
- Guideline Value
The guideline Land Valuation method is whereby the government provides the rates of valuation of every area, this is helpful when determining stamp duty to pay.
Tips to prepare your land for Valuation
As a property owner, it is important to prepare well before the valuation of your land begins, here are some tips to help you prepare.
Gather your land documents
The valuer will request land ownership documents such as land title, certificate of the lease or any other related document such as personal market appraisal of the land that you may have conducted.
Conduct a personal research
It is advisable as a property owner to have a personal review and comparison of prices of land within your area and have an estimated value of land. This will help you have a rough estimate of the value of your land.
Have a list of the features of your property
Highlight all the features inside and surrounding your property as this will be useful when determining the value of land, these can include the fence, water availability electricity connectivity, proximity to amenities among others.
Ensure you are available during valuation of your land
It is crucial to be available when the valuation of your land is being done, you can set apart a day or two to focus on the valuation of your property.
Steps of Conducting Valuation of Land
- Understanding the purpose of the valuation
The first thing you need to understand is the purpose of valuation, is it for long – term benefits or immediate benefits such as using the property to take a loan or selling the property right away? Once you identify the purpose, you can go ahead with the valuation
- Agree on terms of reference with the valuer
At this stage, the property owner and the valuer agree on the objectives and scope of the valuation which will form a contract between the two. This will help determine the valuation of the land method to be used.
- Property inspection
In this step a thorough inspection of the land to determine the available amenities begins, this is where the owner also prepares all the documents required for the valuation process.
- Land valuer collects data of the property
Alongside the information you have provided as the property owner, the land valuer will also collect data on the property to discover more details and also prepare the land valuation report.
- Submissions of the report
Once al details are compiled, the land valuation report is prepared and subdivided to you as the property owner.
