How to do the Market Value of Property Calculation

If you want to buy or sell a property, it is important to do a proper evaluation of the Property Market Value.  The market value of the property is also called its guidance value, is needed to assess how much a property is truly worth. This will help to make a good decision when it comes to buying and selling property. Let us look at the different methods to do Market Value of Property Calculation.

How to Calculate Property Market Value?

The value of land is increasing in many parts of India. However, there are also areas where the land value has not changed for years. Many factors will determine the market value of the land. These include the property’s location, size, shape, level, as well as legal procedures involved. Let us look at how these five methods help in the market value of property calculation:

  1. Belting Method- Under this method, the property is evaluated by dividing the plot into three belts. These belts are assessed separately at different prices. This is a very commonly used method to calculate the market value of the big properties in urban areas. The maximum value is for the belt closest to the main road. A two-third rate of the first belt is given for the second belt while the third belt will be given half value of the first belt.
  1. Land and Building Method- This method helps to determine the value of the land and building separately. The valuation of the building is added to the value of the land to derive the total market value of the property. 
  1. Comparative Property Valuation Method- This method is also called the sales comparison approach. It will assess the value of similar properties in the locality to determine the estimated cost of the particular property being considered. It is important to note that even if the building is a part of the same housing society, there can be variations in price because of many factors like the direction and size of the house, house interiors, and the legal issues involved. 
  1. Development Method – This method of the market value of property calculation helps to calculate the potential of a house/ plot. It will consider the scope of any development of the area it is located in and any proposed development plans to determine any rise in its market value. 
  1. Guidance Value Method- The state government will set a minimum value for the different properties located in different localities. This is the lowest value at which the property must be registered. It is important to be aware of this value at the time of buying or selling a property. A property that is registered at a price lower than the set guidance value is considered an illegal registration. This value is changed regularly as per the market standards.

Also Read :Calculate Value Of Property For Home Loan

A seller has the right to sell the property at the rate he demands. A buyer cannot force him to sell at the market value of the property as determined by the government. In case you get a property for a price lower than its market value even then it can be registered at the guidance value that has been set by the government. The payment of the property tax on its market value only. In the case of purchasing the property for an amount greater than the market value then you are required to register it at its actual value and then pay the taxes accordingly.


This article gave us an idea about what is property market value and how we can use different methods of the market value of property calculation like the belting method, comparative method, land and building method, development method, and guidance value method. 

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