valuation of land

If rents are relatively stable and land prices reflect rental values ​​, why land prices are unstable One obvious reason is interest rates. Land prices are very sensitive to fluctuations in interest rates since mostland transactions are financed by borrowing  valuation of land This is not only real       interest rate movements that are relevant here, but the expectation of interest rate changes. Land prices are also subject to speculative valuation surges. When they themselves of access, land prices can drop dramatically. It would be inappropriate to import into this super position frothy based assessment LVT. It would be a mistake,therefore, based on capital values ​​LVT. Annual rental  values ​​alone can meet the requirements necessary for the stability and equity in valuation of land 

valuation of land

At first glance, this seems valuation odd, even perverse. Apart from agricultural land, bare land is rarely if ever rented. There is evidence that little or no rent. On the other hand, building land is constantly bought and sold and it is not difficult to find good objective evidence for capital values​​.The problem with capital values​​, however, is that they are subject to the vagaries and vicissitudes of market sentiment and may fluctuate valuation of land considerably. The performance of the LVT-based capital values ​​may vary considerably. This lack of stability and predictability in performance is the basis of capital value unsatisfactory from the stand point of the government. It is also unsatisfactory from the stand point of the taxpayer, as the tax payable can fluctuate from year to year valuation