Market Value, Book Value, Capital Cost | Property Valuation System

Property Valuation System

Studying Building Estimation and Costing helps us evaluate the value of the property according to its current market trends. The Value of a property is listed into various different categories such as;

  1. Market Value
  2. Book Value
  3. Capital Cost
  4. Capitalized Value
Property Valuation System
Property Valuation System

In this article, we are going to discuss different categories under which a property is evaluated that is Valuation is done.

Market Value

The market value of a property is the amount which can be obtained at any particular time from the open market if the property is put for sale. The market value will differ from time to time according to demand and supply.

The market value also changes from time to time for various miscellaneous reasons such as changes in industry, changes in fashions, means of transport, cost of materials and labour etc.

Book Value

Book value is the amount shown in the account book after allowing necessary depreciations. The book value of a property at a particular year is the original cost minus the amount of depreciation allowed per year and will be gradually reduced year to year and at the end of the utility period of the property, the book value will be only scrap value.

Capital cost

Capital cost is the total cost of construction including land, or the original total amount required to possess a property. It is the original cost and does not change while the value of the property is the present cost which may be calculated by methods of Valuation.

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