TERMS (MRPAAO, Mass Appraisal Guidebook, USPAP, IVS) Flashcards
during this era there was no real property tax in the Philippines
Spanish Era
During the encomienda system, taxes on land were levied primarily on the male tenant of ___ years old as
personal taxes or tributes rather than the real land taxes
16-60
regime that real property taxation in the Philippines was formally instituted
American
Act Nos. ___ of the Philippine Commission organized the
municipal and provincial governments, respectively. These laws authorized the municipality and the province to levy taxes on real properties.
82 and 83
Provincial and Municipal Board of Assessors were created under this law in each province and municipality
Act Nos. 82 and 83
On December 5, 1932, ___ “An Act Revising and Compiling the Assessment Laws” was passed, which in effect repealed, compiled and incorporated into a single Body all existing laws relating to the assessment and collection of real property taxes.
Act No. 3995
President Ferdinand E. Marcos initiated reforms in real property tax administration under ___
PD Nos. 25 and 76
___ entitled “The Real Property Tax Code” was promulgated as the law governing the Real Property Tax Administration in the Philippines.
PD 464
method of land valuation in the absence of vacant land sales,
whereby improvement values obtained from cost model are subtracted from sales prices of improved parcels to yield residual land value estimates
Abstraction Method
for newly-acquired machinery not yet depreciated and appraised
within the year of its purchase, refers to the actual cost of the machinery to its present owner, plus the cost of transportation, handling, and installation at the present site. The
cost may also include freight and insurance charges, brokerage, customs duties and taxes
Acquisition Cost
refers to the purpose for which the property is principally or predominantly utilized by the person in possession thereof
Actual Use
is defined as an act or fact in reality
Actually used
is defined as that use without anything intervening proximately or without
an intervening agency or person
Directly used
means the primary or inherent use and does not preclude such incidental uses as are directly connected with, essential to, and in furtherance of the
primary use
Exclusively used
is a levy on real property determined on the basis of a fixed proportion of the value of the property
Ad Valorem Tax
is land devoted principally to planting of trees, raising of crops, livestock and poultry, dairying, salt making, inland fishing and similar aqua cultural activities, and other agricultural activities, and is not classified as mineral, timberland, residential, commercial or industrial land
Agricultural Land
is the act or process of determining the value of a property as of a specific
date for a specific purpose
Appraisal
defined as the act of estimating the value of a property
Appraisal
It is an estimate or opinion of value, usually market value or value as defined by the appraiser
Appraisal
one who conducts appraisals; specifically, one who possesses the
necessary qualifications, ability and experience to execute or direct the appraisal of real or personal property
Appraiser/Assessor
a transaction freely arrived at in the open market, unaffected by abnormal pressure or by the absence of normal competitive negotiation as might be true in the case of a transaction between related parties
Arm’s Length Transaction
is the act or process of determining the value of a property or proportion
thereof subject to tax, including the discovery, listing, classification and appraisal of properties
Assessment
is the percentage applied to the market value to determine the taxable value of the property
Assessment Level
is a means of assigning on every parcel of land and upon all taxable improvements on such lands, a current and fair market value, an assessment
level to be able to arrive at an assessed value for each land and each improvement
Assessment Operations
is the market value of the property multiplied by the assessment
level. It is synonymous to taxable value
Assessed Value
is a reference point from which the value of other similar properties is
measured
Benchmark
are permanent structures adhered to the land usually used for habitation ,
commercial and industrial purposes and for other various uses and not mere superimpositions on the land like a “barong barong” or quonset fixtures
Buildings
is the combination of rights associated with the ownership of real property, e.g., the right to use, to sell, to lease, to give away, or to exercise all of these rights
Bundle of Rights
is the process of converting into present value (or obtaining the
present worth of) a series of anticipated future periodic installment of net income
Capitalization
an open-sided roofed automobile shelter that is usually formed by an
extension of the roof from the side of a building
Carport
an “area or place where the dead are buried, a place of burial set apart
either by municipal authority or private enterprise for the internment of the dead, etc., and this includes whatever property is necessary for use of the cemetery such as paths, ornamentation and the land within the cemetery limits acquired for but not yet actually used for the burial of the dead
Cemetery
refer to any body of persons or trust established for charitable purposes such as (1) relief of poverty; (2) advancement of education; (3)
advancement of religion; and (4) other purposes of a charitable nature beneficial to the community.
Charitable Institutions
is a building set apart for public worship; a place of worship of any religion
Church
is property devoted principally for the object of profit and is not classified as agricultural, industrial, mineral, timberland, or residential property
Commercial Property
refers to a document accompanied by maps and all the taxable improvements on such lands, a current and fair market value, and assessment level to be able to arrive at an assessed value for each land and each improvement.
Comprehensive Land Use Plan
the increase in the value of the other interests of the property owner that can be attributed to the new use to which his former property will be put by the expropriating authority
Consequential Benefits
damages to other interests of the owner that can be attributed to the expropriation
Consequential Damages
a building including the land it actually occupies and the adjacent ground or
vegetable garden for the use of the parish priest in the ordinary life
Convent
is a duly registered association of persons with a common bond of
interest, who have voluntarily joined together to achieve a lawful common or social economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally
accepted cooperative principles
Cooperative
is the amount of money necessary to produce, create or manufacture an item of property
Cost
is also known as replacement or reproduction cost less depreciation
Cost Approach
Cost approach is based on the theory of
Substitution
encompasses all activities leading to the establishment and operationalization of a computer-assisted data base for Real Property Tax Administration (RPTA) among which includes the familiarization/training of key
personnel, encoding and validation of data acquisition and installation of standard RPTA system, generation of reports and preparation of complementary manual of procedures.
Data Computerization
is a loss in value brought about by physical deterioration and/or
obsolescence
Depreciation
is the value remaining after deducting depreciation from the
acquisition cost
Depreciated Value
is the estimated period over which it is anticipated that a machinery
may be profitably utilized
Economic Life
is the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy
Fair Market Value/Market Value
a strip of land along the seashore, the use of which may or may not
be granted by the government to private persons or corporations
Foreshore Land
a building or compartment of a building used for housing an automotive
vehicle
Garage
value in use
Going Concern Value
the most probable use of a property which is physically possible, appropriately justified, legally permissible, financially feasible and which results in the highest value of the property being valued
Highest and Best Use
is land devoted to or cultivated for planting of vegetables, flowers and other ornamental plants
Horticultural Land
is a valuable addition made on the property or an amelioration in its
condition, which is more than a mere repair or replacement of parts involving capital expenditures and labor, intended to enhance its value, beauty or utility or to adapt it for
new or further purposes
Improvement
an appraisal technique used to estimate the market value of a
property on the basis of the income it produces or is capable of producing
Income Approach
is land devoted principally to industrial activity as capital investment and is not classified as agricultural, commercial, timber, mineral or residential land
Industrial Land
is the RPTA Information kit for the
use of LGU officials, assessors and treasurers in the RPTA Project
Information and Education Campaign (IEC)
described as the just and complete equivalent of the loss which
the owner of the thing expropriated has to suffer by reason of the expropriation
Just Compensation
refers to the manner of utilization of land, including its allocation,
development and management
Land Use
refers to the act or process of changing the current use of a piece of agricultural land into some other uses as approved by the Department of Agrarian Reform (DAR)
Land Use Conversion
embraces machines, equipment, mechanical contrivances, instruments,
appliances or apparatus which may or may not be attached, permanently or temporarily to the real property
Machinery
is a term applied to the type of forest occurring on tidal flat along
the seacoast, extending along stream where the water is brackish
Mangrove Land
a tract of low-lying land usually under water
Marsh Land
It is a process of analyzing sales
of similar recently sold properties in order to derive an indication of the most probable sale prices of the property being appraised
Market Data Approach
is the price agreed upon by the buyer and seller in the open market in
the usual and ordinary course of legal trade and competition
Market Value
is the process of valuing a group of properties as of a given date
using standard methodology, employing common data, and allowing for statistical
testing
Mass Appraisal
are lands exclusively used as burial ground and developed for profit
Memorial Parks
are lands in which minerals, metallic or non-metallic, exist in sufficient quantity or grade to justify the necessary expenditures to extract and utilize such materials
Mineral Lands
is an Islamic place of public religious worship
Mosque
is the classification and administration of all designated protected areas to maintain essential ecological processes and life-support system, to preserve genetic diversity, to ensure sustainable use of resources of forest therein, and to maintain their natural condition to the extent possible
National Integrated Protected Areas Systems (NIPAS)
is a cemetery owned and operated by the government, by religious corporations, by associations and societies exclusively for its members and not for profit
Non-Profit Cemetery
is land specifically devoted to various fruit trees and plants
Orchard
is ministerial residence used in connection with any place of worship of
any denomination. It shall include the house appurtenant to a cathedral, to a synagogue, or to a country-meeting house
Parsonage
means public usefulness, utility, or advantage, or what is productive of
general benefit, so that any appropriating of private property by the State under its right of eminent domain, for purposes of great advantage to the community
Public Use
the physical land and all those items, which are attached to the land. It is the physical, tangible entity which can be seen and touched, together with all the additions on, above, or below the ground
Real Estate
includes all the rights, interests, and benefits related to the ownership
of real estate
Real Property
involves collection of all real property
taxes and penalties due and payable to the local government unit (LGU) through the positive and total enforcement of tax laws and their penal provisions
Real Property Tax Collection Operations
is the assigning of new assessed values to property, particularly real estate, as the result of a general, partial, or individual reappraisal of the property
Reassessment
is the establishment and maintenance of permanent official records and files in the office of the Provincial, City or Municipal Assessor so that an updated and regular listing of all properties is readily available.
Records Conversion and Management
refers to the act of specifying how
agricultural lands shall be utilized for non-agricultural uses such as residential, commercial or industrial, as embodied in the land use plan
Reclassification of Agricultural Lands
means a use of such property by a religious society or body of
persons as a stated place for public worship, Sunday schools and religious instructions
Religious Purpose
is the value corresponding to the remaining useful life of the
machinery
Remaining Value
is the cost of constructing a similar property which is equally desirable and has the same utility as the one under appraisal
Replacement Cost
is the cost of constructing an exact replica of the building being appraised based on current prices of labor and materials and contractor’s practices
Reproduction Cost
is land principally devoted to habitation
is land principally devoted to habitation;
are those machines, equipment, appliances or apparatus permanently attached to residential land and/or buildings
Residential Machinery
used by religious organization as a place for public worship and
the education for men for priesthood which mainly involves religious instructions, is deemed considered used for religious purposes
Seminary Building
all lands, buildings, and other improvements thereon actually, directly and exclusively used for hospitals, cultural, or scientific purposes, and those owned and used by local water districts, and government owned or
controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power
Special Classes of Real Property
refers to selected areas which have the potential to be developed into agro-industrial, industrial, tourist/recreational, commercial, banking, investment and financial centers
Special Economic Zones
are properties, which are designed, constructed and developed for a specific use or purpose
Special Purpose Properties
refers to housing programs and projects covering houses and lots
or home lots only undertaken by the government or the private sector for the underprivileged and homeless citizens which shall include sites and service developments, long-term financing, liberalized terms on interest payments, and such other benefits in accordance with R. A. 7279
Socialized Housing
is a graphic representation of a portion of the earth’s surface drawn to scale
on standard size drawing material, having property lines and jurisdictional boundaries delineated showing all parcels of real property and identifying each separate real property ownership by a unique number.
Tax Map
is a highly accurate method of field operations for identifying real
property units, defining property boundaries, determining actual use, and discovering undeclared properties for taxation purposes
Tax Mapping
is land identified as forest or reserved area by the government, which
may or may not be granted to a concessionaire, licensee, lessee or permitee
Timberland
refer to specific sites for tourism development located in areas identified as priorities in the national and regional tourism master plans, as well as those designated through legislation and executive issuances as tourist zones which can be developed into tourism estates or integrated resort, leisure and recreation complexes, and other tourism-related facilities
Tourism Development Areas
is the period of time over which the property may reasonably be expected
to perform the function for which it was designed or intended
Useful Life
the capacity of an economic good to satisfy human desires or needs
Utility
the date the conclusion or opinion rendered in an appraisal is
applicable and valid
date of valuation
the relationship between a thing desired and a potential purchaser
value
refers to the present worth of future benefits arising out of ownership of property
value
exists when an item of property has utility, is relatively scarce, arouses the desire of potential buyer to buy and is backed by the purchasing power
value
refers to a catchments area or drainage basin from which the water of a
stream or stream system is drawn
Watershed
is the delineation/division of a city/municipality into functional zones where only specific land uses are allowed
Zoning
It directs and regulates the use of all lands in the community in accordance with an approved or adopted land use plan for the city/municipality. It prescribes setback provisions, minimum lot sizes, building heights
and bulk
zoning
refers to a local legislation approving the development control/zoning plan and providing for the regulations and other conditions on the uses of land
Zoning Ordinance
maps of surveys conducted for extensive areas consisting of several lots for cadastral registration proceedings, or for purposes of locating property lines and improvements, and are primarily in connection with the extent and ownership of land
Cadastral Land Survey Maps
maps of surveys conducted for isolated parcels of land used for agricultural, residential, industrial, commercial, resettlements or other purposes
Isolated Land Survey Maps
maps of surveys conducted for converting graphical cadastral lots computed and plotted in a system of the cadastral project
Conversion Survey Maps
maps of surveys conducted for extensive areas that take into account the curvature of the earth
Geodetic Land Survey Maps
maps showing the topography by contour lines of lands vacant or under water or covered by man-made structures
Topographic Maps
angles measured from the north and the south towards the east or the west
bearing
clockwise angle measured from some reference line, usually a meridian
Azimuth
FAAS
Field Appraisal and Assessment Sheet
Valuation of land as if vacant or of land and improvements on the land or for the benefit of the land is an ___
economic concept
value is determined by the interaction of the forces of supply and demand in the appropriate market as of the date of appraisal
Principle of Supply and Demand
it is the use from among all reasonable, probable, and legal uses that is found to be physically possible, appropriately justified, and financially feasible and which results in the maximum property value.
Principle of Highest and Best Use
states that a prudent purchaser would pay no more for a property than the cost of acquiring an equally desirable substitute in the market
Principle of Substitution
the value of an agent in production or a component of a property depends on how much it contributes to the whole, or how much its absence detracts from the value of the whole
Principle of Contribution
holds that profit tends to breed competition and excess profit
tends to ruinous competition
Principle of Competition
when successive increments of one or
more factors in production are added to a fixed amount of the factors, there is a resulting enhancement in income up to a point of maximum returns
Principle of Increasing and Decreasing Returns
balance among the factors of production is achieved at the point of
diminishing returns, which is the point of maximum value
Principle of Balance
change is inevitable and constantly occurring
Principle of Change
value is created by the expectations of benefits to be derived in the future
Principle of Anticipation
maximum value is realized when a reasonable degree of homogeneity and compatibility is present
Principle of Conformity
between dissimilar properties of the same type, the value of the lesser
property is enhanced by the presence of the superior
Progression
between dissimilar properties of the same type, value of superior property is
affected adversely by the presence of the inferior
Regression
is the cost of producing or constructing the property in like kind at current prices using the same materials, construction or manufacturing
standards, design layout, and quality of workmanship.
Reproduction Cost New (RCN)
is the cost of producing or constructing a property of equivalent utility at current prices using modern materials according to modern standards,
design and layout
Replacement Cost
In this method, the computation is made of the quantity and quality of all materials used and of all categories of labor hours required, to which unit cost
figures are applied to arrive at a total cost estimate for materials and labor
The Quantity Survey method
In this method, the unit costs for various property components
are developed, using workable units such as the square meter, linear meter, or other appropriate basic unit of measurement, and applied to recorded unit quantities
Unit-in-Place method
In this method, the cost is estimated by applying an adjustment factor to original cost
Index Method
In this method, the cost is estimated from known construction cost of similar property expressed in terms of units of size or capacity
Comparative Method
the loss in value resulting from wear and tear in operation and exposure to the elements
Physical Deterioration
is loss in value brought about by physical deterioration or wear and tear,
functional obsolescence and economic obsolescence
Depreciation
the loss in value within the property as a result of the development of new technology
Functional Obsolescence
the loss in value resulting from influences external to the property itself
Economic Obsolescence
conditions which are those which can be corrected economically through repairs or replacement, or a specific expenditure made to eliminate a deficiency
Curable
conditions which reflect a gradual loss in value over time resulting in a present condition, state, or level of operations which is not economically feasible without a complete property replacement
Incurable
this approach is based on the proposition that, an informed purchaser would pay no more for a property than the cost of producing a substitute property with the same utility as the subject property
Cost Approach
is that approach in appraisal analysis which is based on the proposition that an informed purchaser would pay no more for a property than the cost
of acquiring an existing property with the same utility
Market Data Approach
This approach is predicated on the proposition that an informed purchaser would pay no more for a property than the cost of obtaining an income stream of the same size and embodying the same risk as that involved in the subject property
Income Approach
is the mathematical process that translates or converts net income into an indication of value
Capitalization
the final step in estimating value
Reconciliation
A full inspection is made with an attempt to make a full interior inspection
Level 1 Inspection
An exterior inspection is made. No attempt at an interior inspection is made unless a major change to the property is detected
Level 2 Inspection
A street inspection is conducted. (Drive-by inspection only, unless a major change to the property is detected.)
Level 3 Inspection
No on-site inspection is made
Level 4 Inspection
All assessments or re-assessments made after the first (1st) day of January of any year shall take effect on the first ___
1st day of January of the succeeding year
reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great or sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or any other abnormal cause, shall be made within ___ from the date any such cause or causes occurred, and shall take effect at the beginning of the ___ following the reassessment
ninety (90) days, quarter next
real property declared for the first time shall be assessed for taxes for the period during which it would have been liable but in no case for more than ten ___, prior to the date of initial assessment
(10) years (plus the current year)
interest for delinquency of RPT shall be subject to an interest at the rate
2% per month
Stripping method shall not be applied to
Commercial and industrial properties, corner lots, subdivision lots
The appraisal of buildings shall be in accordance with the approved ___
Schedule of Base Unit Construction Cost (SBUCC)
are those elements of cost directly related to the acquisition and installation of the unit, such as the basic cost, freight charges, insurance, bank charges and commission, duties and taxes, other landing charges and handling and cost of transportation to site
direct cost
are those elements of cost not directly related to the acquisition of a specific
item of the property but with relation to the installation and acquisition of the entire property, such as, design and engineering, technical know-how, and pre-operating expenses
Indirect Costs
Section 225 of the Local Government Code provides that depreciation allowance for machinery shall be made at a rate not exceeding ___ of its original cost or its replacement or reproduction cost
five percent (5%)
the remaining value for all kinds of machinery shall be fixed at not less than ___ of such original, replacement, or reproduction cost for so long as the machinery is useful and in operation.
twenty percent (20%)
The Department of Agrarian Reforms (DAR) is mandated to approve or disapprove applications for conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses pursuant to ___
Section 4 of EO 129-A
generally refers to the cost of purchasing an item or property
Acquisition Cost
refers to the purpose for which the property is principally or predominantly
utilized by the person in possession thereof
Actual Use
lands devoted principally to the planting of trees, raising of crops,
livestock and poultry, dairying, salt making, inland fishing and similar aqua-cultural activities, and other agricultural activities
Agricultural Lands
is the act or process of estimating the value of a property as of a specific date for a specific purpose
Appraisal/Valuation
one who conducts appraisals; specifically, one who possesses the
necessary qualifications, ability and experience to execute or direct the appraisal of real or personal property
Appraiser/Valuer
a transaction freely arrived at in the open market, unaffected by abnormal pressure or by the absence of normal competitive negotiation as might be true in the case of a transaction between related parties
Arm’s Length Transaction
a value which is based upon definitions contained within applicable laws
relating to the assessment, rating, and/or taxation of property
Assessed Value
is the act or process of estimating the value of a property, or proportion thereof subject to tax, including the discovery, listing, classification, and appraisal of properties
Assessment
is the percentage applied to the market value to determine the taxable value of the property
Assessment Level
refers to an official in the local government unit, who performs appraisal and assessment of real properties, including plants, equipment, and machineries, essentially for
taxation purposes
Assessor
the price that is the final accepted bid at a public auction; may or may not
include any fees or commissions
Auction Price
a statement of the fundamental measurement principles of a valuation on a specified date
Basis of Value
is a reference point from which the value of other similar properties is
measured or tested
Benchmark
are permanent structures adhered to the land, usually used for habitation,
commercial and industrial purposes and for other various uses and not mere superimpositions on the land like a ‘barong-barong’ or temporary fixtures
Buildings
is the combination of rights associated with the ownership of real property, e.g., the right to use, to sell, to lease, to give away, or to choose to exercise all or none of these rights
Bundle of Rights
at a given date, the conversion into the equivalent capital value of net income or a series of net receipts, actual or estimated, over a period
Capitalization
any multiple or divisor used to convert income into capital value
Capitalization Factor/ Capitalization Rate
an open-sided roofed automobile shelter that is usually formed by an extension of the roof from the side of a building
Carport
the actual or estimated periodic net income produced by the revenues and
expenditures/outgoings in the operation of an income producing property
Cash Flow
an area or place where the dead are buried, a place of burial set apart either by municipal authority or private enterprise for the internment of the dead, etc.
Cemetery
is land set aside or devoted principally for the object of profit and is not
classified as agricultural, industrial, mineral, timber, or residential land
Commercial Land
is property devoted principally for the object of profit and is not classified as agricultural, industrial, mineral, timberland, or residential property
Commercial Property
data generally used in a valuation analysis to develop a value estimate
Comparable Data
Contractor’s method
Cost Approach
agricultural properties used for growing commodities that are typically planted and harvested within a twelve-month cycle
Crop(ping) Farms
an application of the cost approach used in assessing the value of specialized assets where direct market evidence is limited or unavailable
Depreciated Replacement Cost
adjustments made to the costs of reproducing or replacing the asset to reflect physical deterioration and
functional (technical) and economic (external) obsolescence
Depreciation
is the value remaining after deducting depreciation from the replacement
cost
Depreciated Value
a rate of return (expressed as a percentage) used to convert a monetary sum, payable or receivable in the future, into present value
Discount Rate
a financial modeling technique based on explicit assumptions regarding the prospective cash flow (income and expenses) to a property or business
Discounted Cash Flow (DCF) Analysis
a non-possessory (incorporeal) interest in landed property conveying use, but
not ownership, of a portion of that property
Easement
is the estimated period over which a building or machinery is anticipated
to be profitably utilized
Economic Life
a loss in value due to factors outside the subject property
External Obsolescence
this method is the procedure whereby (either) the land or improvements
value can be determined by deducting (extracting) the value of a known component (either land or improvements) from the total sale price or value, to provide a remaining amount, which is then deemed to be the value of the unknown component
Extraction Method
absolute ownership subject only to limitations imposed by the country
Fee Simple (Estate) / Freehold
a circumstance where a seller is under compulsion to sell and/or a proper
marketing period is not available
Forced Sale
An estate held for perpetuity
Fee Simple / Freehold
a loss in value within a structure due to changes in tastes, preferences, technical innovations, or market standards
Functional Obsolescence
continuing in operation for the foreseeable future. An
operating business
going concern
an intangible but marketable asset based on the probability that customers will continue to resort to the same premises where the business is carried on under a particular name, or where goods are sold or services provided under a trade name, with
the continuing prospect of earning an acceptable profit is likely
Goodwill
usually long-term lease or land wherein the lessee is permitted to improve
or build on the land and to enjoy those benefits for the term of the lease
Ground Lease
a lease to a single entity that is intended to be the holder of subsequent leases to sub-lessees who will be the tenants in possession of the leased premises
Head lease or Master Lease
land devoted to or cultivated for planting of vegetables, flowers and
other ornamental plants
Horticultural Land
buildings, structures, or some modifications to land, of a permanent nature, involving expenditures of labor and capital, intended to enhance the value or utility of the property. Improvements have differing patterns of use and economic lives.
Improvements
a comparative approach to value that considers income and expense data relating to the property being valued, and estimates capital value
through a ‘capitalization’ process involving an expected rate of return on the funds employed
Income (Capitalization) Approach
the ratio between the sale price or value of a property and the average annual income or income expectancy
Income Multiplier or Years’ Purchase
is land devoted principally to industrial activity as capital investment and
is not classified as agricultural, commercial, timber, mineral or residential land
Industrial Land
the discount rate that equates the present value of the net cash flows of a project to the present value of the capital investment
Internal Rate of Return (IRR)
the rate of return which gives a zero Net Present Value
Internal Rate of Return (IRR)
a valuation procedure that capitalizes expected future income or utility
as a basis for estimating the Market Value of the subject asset
Investment Method
lands used to produce crops or forage for livestock which require the
application of water other than that from natural rainfall
Irrigated Land
include the space beneath the surface which extends to the center of the earth, and the space above which extends to the sky
Land
refers to the manner of utilization of land, including its allocation, development and management
Land Use
a contract arrangement in which rights of use and possession are conveyed from a property’s title owner (called the landlord, or lessor) in return for a promise by another (called a tenant or lessee) to pay rents
Lease
ownership interest that is created by the terms of a lease rather than the underlying rights of real estate ownership
Lease Interest
fixed improvements or additions
to land or buildings, installed by and paid for by the tenant to meet the tenant’s needs
Leasehold Improvements or Tenant’s Improvements
machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached permanently or temporarily to the real property
Machinery
This is an appraisal procedure in which the market value estimate is predicated upon prices paid in actual market transactions and current listings
Market Data Approach
the estimated amount for which a property, or space within a property,
should lease on the date of valuation between a willing lessor and a willing lessee on appropriate terms in an arm’s-length transaction, after proper marketing wherein the parties
had each acted knowledgeably, prudently and without compulsion
Market Rent
the practice of appraising multiple properties as of a given date by a
systematic and uniform application of appraisal methods and techniques, employing common data that allow for statistical review and analysis of results
Mass Appraisal
are lands exclusively used as burial ground and developed for profit
Memorial Parks
are lands in which minerals, metallic or non-metallic, exist in sufficient
quantity or grade to justify the necessary expenditures to extract and utilize such materials
Mineral Lands
a pledge of an interest in property as security or collateral for repayment of a
loan with provision for redemption on repayment
Mortgage
the measure of the differences between the discounted revenues,
or inflows, and the costs, or outflows, in a discounted cash flow analysis
Net Present Value (NPV)
a cemetery owned and operated by the government, by religious corporations, by associations and societies exclusively for its members and not for profit
Non-Profit Cemetery
a loss in value due to a decrease in the usefulness of property caused by decay, changes in technology, people’s behavioral patterns and tastes, or environmental changes
Obsolescence
land specifically devoted to various fruit trees and plants
Orchard
those expenses necessarily incurred in managing and maintaining a rental or
investment property
Outgoings
tangible assets, other than realty, that are held by an entity for use in the production or supply of goods or services, for rental to others, or for
administrative purposes; and are expected to be used over a period of time
Plant, Machinery and Equipment
an amount asked, offered, or paid for a good or service
Price
a prudent person will not pay more for a good or service than the cost of acquiring an equally satisfactory substitute good or service, in the absence of the complicating factors of time, greater risk, or inconvenience
Principle of Substitution
a legal concept encompassing all the interests, rights and benefits related to
ownership
Property
an amount of income generated by an investment, expressed as a percentage
of the cost (or value) of the investment
Rate of Return
land and all things that are a natural part of the land
Real Estate
all the rights, interests, and benefits related to the ownership of real estate
Real Property
is the assigning of new assessed value to property, particularly real estate,
as the result of a general, partial, or individual reappraisal of the property
Reassessment
refers to the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, commercial or industrial, as embodied in the land use plan, subject to the requirements and procedures for land use conversion
Reclassification of Agricultural Lands
is the period of time expressed in years from the date of appraisal to the date when a machinery or building/improvement become valueless
Remaining Economic Life
is the value corresponding to the remaining useful life of an asset,
commonly used in regard to the machinery
Remaining Value
the term sometimes used by valuers
in the Philippines equivalent to the term Depreciated Replacement Cost
Replacement Cost New Less Depreciation (RCNLD)
land principally devoted to habitation
Residential Land
the estimated amount that an entity would currently obtain from disposal
of an asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life
Residual Value
rights or privileges, acquired through use or contract, to pass over a portion
or strip of landed property owned by another; a right or privilege to pass over a property of another person
Right of Way
a comparative approach to value that considers the sales of similar or substitute properties and related market data, and establishes a value estimate by processes involving comparison
Sales Comparison Approach
refers to a table of market values of real properties within a local government unit prepared by assessors pursuant to existing laws, rules and regulations
Schedule of Market Values (SMV)
the value that the basic recoverable materials (usually metals) of a physical
property would have as junk if it were completely broken up or too badly deteriorated to serve its normal purpose
Scrap Value
the value of an asset at the end of its physical life
Scrap Value
a buyer to whom a particular asset has Special Value because of advantages
arising from its ownership that would not be available to general buyers in the market
Special Buyer
a property that is rarely, if ever, sold
in the market, except by way of sale of the business or entity of which it is part, due to uniqueness arising from its specialized nature and design, its configuration, size, location, or otherwise
Special Purpose Properties/Specialized Property
summation approach
Cost Approach
a graphic representation of an LGU, or part of an LGU, drawn to scale and
having property lines and jurisdictional boundaries delineated showing all parcels of real property and identifying each separate real property ownership by a unique number
Tax Map
a highly accurate method of field operations for identifying real property
units, defining property boundaries, determining actual use, and discovering undeclared properties for taxation purposes
Tax Mapping
any form of lease rental arrangement in which the lessor/landlord receives a form of rental that is based upon the earnings of the lessee/tenant
Turnover Rent or Participation Rent
the period of time over which the property, with typical maintenance, may reasonably be expected to perform the function for which it was designed or intended
Useful Life
a relative or comparative term rather than an absolute condition, that refers to the degree of usefulness of a property
Utility
the process of estimating value
Valuation
the date as of which the Valuer’s opinion of value applies
Valuation Date/ Date of Valuation
a document that records the instructions for the assignment, the basis and purpose of the valuation, and the results of the analysis that led to the opinion of value
Valuation Report
the value of a property or asset to the owner or user in the hands of the current owner/user while currently occupied for that specific purpose or undertaking a particular operation
Value in Use
the value added to the land by improvements such as buildings,
structure or modifications to the land, of a permanent nature, involving expenditures of labor and capital, and intended to enhance the value or utility of the property
Value of Improvements
refers to a person who conducts valuation/appraisal; specifically, one
who possesses the necessary qualifications, license, ability and experience to execute or
direct the valuation/appraisal of real property
Valuer/Appraiser
is the delineation/division of a city/municipality into functional zones where only specific land uses are allowed
Zoning
refers to legislation approving the development control/zoning plan
and providing for the regulations and other conditions on the uses of land
Zoning Ordinance
refers to the information collected directly by the LGU from transaction
records, the Registry of Deeds (ROD), and Tax Declarations which may be lodged directly into the database
primary data
are information from sources that are not directly linked to the transaction
secondary data
agricultural property used for the production of milk from cows or for
other dairy products
Dairy Farm
agricultural property used for growing non-orchard trees that are periodically harvested over extended growing periods (10 to 20 years or more)
Forest/Timberland
crops grown from plantings that have extended life beyond one year or one-crop cycle
Perennial Planting
the act or process of developing an opinion of value
APPRAISAL
the act or process of developing an opinion about the quality of another appraiser’s work
APPRAISAL REVIEW
a valuation service that is provided by an appraiser as a consequence of an agreement with a client
ASSIGNMENT
Assumptions, extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional
exceptions, and other conditions that affect the scope of work
ASSIGNMENT CONDITIONS
a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment
BIAS
entity pursuing an economic activity
BUSINESS ENTERPRISE
the interests, benefits, and rights inherent in the ownership of a business enterprise or a part thereof in any
form
BUSINESS EQUITY
a study of the cost-benefit relationship of an economic endeavor
FEASIBILITY ANALYSIS
a statement of the fundamental measurement assumptions of a valuation
Basis of value
the estimated price for the transfer of an asset or liability between identified
knowledgeable and willing parties that reflects the respective interests of those parties
Fair value
any future economic benefit arising from a business, an interest in a business or from the use
of a group of assets which is not separable
Goodwill
an additional element of value created by the combination of two or more assets or interests where the combined value is more than the sum of the separate values
special purchaser
The act or process of considering and reporting on a valuation undertaken by
another party, which may or may not require the reviewer to provide their own valuation opinion
Valuation Review
