Definitions Flashcards
Market Value
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
Investment Value
The value of an asset to the owner or a prospective owner for individual investment or operational objectives.
Fair Value
The price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date - International Financial Reporting Standard 13 - referred to as such in IVS 2022
Market Rent
The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
Marriage Value
An additional element of value created by where the combined value of two or more interests is more than the sum of the separate values.
Hope Value
Element of market value attributable to the value offered, for a property by prospective purchasers generally in the market, which reflects an expectation of a change in the circumstances of the property in the future.
For example, the prospect of development where there is no current permission for that development but policy provisions may suggest likely to be obtained on application.
Special Purchaser
A particular buyer for whom a particular asset has a special value because of advantages arising from its ownership, that would not be available to other buyers in the market.
Assumption
Where it is reasonable for the valuer to accept that something is true without the need for specific investigation or verification.
Special Assumption
An assumption that assumes facts that differ from those existing at the valuation date or that would not be made by a typical market participant in a transaction on that valuation date.
Examples for reasoning for instructing such valuations:
➢ Anticipation of planning consent
➢ Anticipation of physical change
➢ Anticipation of new letting
➢ Existence of Special Purchaser
➢ Constraint on marketing
➢ Anticipation of new economic or environmental designation
IVS
International Valuation Standards.
As the name suggested they provide internationally accepted, high-level valuation principles and definitions.
Last updated with effect from 31 January 2022.
VPGA
RICS Valuation Practice Guidance – Application / RICS global valuation applications
VPS
RICS global valuation technical and performance standards
PS
Professional Standards
Capital Gains Tax market value definition
Defined under S272 of Taxation of Chargeable Gains Act 1992 as
The price which the asset might reasonably be expected to fetch on a sale in the open market.
In estimating the market value of any assets no reduction shall be made in the estimate on account of the estimate being made on the assumption that the whole of the assets is to be placed on the market at one and the same time
Definition of basis of value for CGT
Section 272 taxation of chargeable gains act 1992
