2. Value and valuation of land

2.1. Market value in the Republic of Belarus

Until 1998 the market value of land in Belarus wasn’t carried out. Since 1998 the theory and practice of such assessments was developed by State Land Committee. Evaluation are carried out in order to partition the property, also determine the initial price of land parcels at the land tenders and auctions to provide land parcels as property for entities and foreign states, also to determine rent, etc.

Work on the land evaluation revealed a significant difference of values of land and normative process for them in many rural locations [187].

2.2. World information

Land is regarded as one of the basic elements from which a nation can derive wealth. Land is a natural thing that exists and is not created by humankind even though its use can be changed by human beings. Marsh land can, for example, be drained or land that was once covered by the sea can be reclaimed, thus creating more land for the construction of buildings.

All land and construction work may be considered to have a value. The value or worth of land depends on the purposes for which that value is determined-the value of a building for insurance purposes may not be the same as the price that it would fetch in an auction or on the open market. The estimation of the value or market price of a property is more an art than a science and depends on many external factors as well as the physical nature of the land or property.

In countries of east and central Europe that are currently in transition there was a cadastral system based on the Russian model. This cadastre focused on land use. Land was “valued” in terms of its agricultural potential based on soil types, climate, rainfall, etc. and the farmers were then instructed to grow appropriate crops. This concept of the term “value” is only indirectly connected with the sort of valuations that are needed to manage land in a market economy.

2.2.1. Methods of valuation

The valuation process is applied to develop a well-supported estimate of the worth of property, taking into account all pertinent data. Appraisers estimate property value with specific procedures that reflect three distinct methods of data analysis: cost, sales comparison, and income capitalization. One or more of these approaches are used in all estimations of value. The approaches employed depend on the type of property, the use of the appraisal, and the quality and quantity of data available for analysis.

All three approaches are applicable to many appraisal problems, but one or more of the approaches may have greater significance for a specific task. For example, the cost approach may be inappropriate in valuing properties with older improvements that suffer substantial depreciation due to physical deterioration or that have become functionally outdated, all of which are difficult to estimate. The sales comparison approach cannot be applied to very specialized properties, such as refuse disposal plants, because comparable data may not be available. The income capitalization approach is rarely used to value owner-occupied residential properties, although it may be used in conjunction with other data. Income capitalization can be particularly unreliable for the commercial or industrial property market. The different values derived can serve as useful checks on one another.