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Property Valuation
What is a Property Valuation?
Valuation is the estimation of the capital value or rental value of land and or buildings at a certain time. Valuations in PNG are governed by the Valuations Act (Chapter 327). The valuation of any property, no matter the size or location is a professional task and should not be taken for granted by the client. The Valuation Act clearly spells out who is capable of undertaking a valuation and it is the responsibility of the client to ascertain the credentials of the Valuator undertaking the valuation of his property. All Valuators must be registered and clients are to ensure that they deal with only registered Valuators.
Purposes of Valuations
Valuations are required for various purposes:
i. Purchase of property
ii. Sale of property
iii. Mortgage or loan purposes
iv. Insurance purposes
v. Financial Accounting purposes
vi. Good business practice
vii. Stamp Duty Assessment purposes
viii. Value Added Taxation (VAT) purposes
ix. Compensation purposes.
Why do I need a Valuation?
The valuation provided by the registered Valuator is a professional opinion of the value of the property and is recognized by banks, government agencies and international organizations. Valuation involves a rigorous process and the Valuator uses various techniques to arrive at his final opinion of value. It is supported by market evidence and gives the client the basis on which the value was obtained. Whether it is a residential, commercial, industrial or agricultural property, it is essential that you have a professional valuation opinion.
What value do I require?
Due to the different purposes for which different valuations are required, it is important to discuss with your Valuator your precise requirements. Very often, most clients require the "market value" of a property. This is the best price at which the sale of an interest in property might reasonably be expected to have been completed unconditionally on the date of valuation, after proper marketing, wherein both parties acted reasonably, prudently and without compulsion". It is also possible for the client to request the existing use value, the open market rental value. Your registered Valuator should be able, after initial discussions, to advise on your precise requirements.
What type of report do I get?
After preliminary discussions with our Valuator, it is possible to request one of the following types of valuation reports:
1. Summary Valuation or Valuation Certificate
This is a single page document giving the purpose of the valuation, a brief description of the property, the interests being valued, the date of valuation and the opinion of value. This is often adequate for stamp duty assessment or for VAT purposes.
2. Full Valuation Report
This is a more comprehensive document, in addition to the information provided in the summary valuation, outlines the various methods used by the Valuator in arriving at an opinion of value. It also undertakes a critical assessment of market activity to arrive at the final opinion of value. This is often required for loan financing and other financial purposes.
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