Legal information

Article introduction: During demolition assessment, the assessment result has a great relationship with the amount of compensation. The five evaluation methods in land acquisition and demolition are replacement cost method, income method, market comparison method, hypothetical development method, and benchmark land price correction method. If an evaluation method that is not conducive to the demolished people is chosen, the amount of compensation will be greatly reduced. The two most commonly used methods for evaluating companies are the cost method and the market comparison method.

The first, replacement cost method

The most common valuation method using the replacement cost method is also to replace the company’s above-ground buildings and factories. Select an assessment time point. If on-site collection is required to begin on January 2, the replacement value will be derived from this actual assessment time point. For example, the value of civil construction + the value of labor + the value of relevant taxes = the replacement value obtained, and then deduct the corresponding discount rate (70% or 80%, etc.). The cost method was widely used in the past, and both land value and house value could be assessed using the cost method. However, the current Regulations on Expropriation and Compensation of Houses on State-owned Land and the Measures for Assessment of House Expropriation require the market comparison method. Valuations are usually based on the market value of nearby homes. If your home is valued based on the cost method now, you may be cheated.

Second, the income method

1. The "Regulations on the Expropriation and Compensation of Houses on State-Owned Land" also has relevant requirements. The Yingting Demolition Team learned that if it is used for production and operation, the income method must be used to evaluate its production and operation, that is, to estimate the expected future income and select an appropriate capitalization rate to reflect the rate of return brought by investing capital in real estate. The concept of capitalization rate is not often used in practice. It is the profit rate generated by investing real estate, houses, and land into related income.

2. The income method mainly evaluates some commercial entities that carry out actual production and operations in practice. Some industries with relatively large added value of labor, labor-intensive industries, and industries with patented technology industries that can bring labor income exponentially increase. In principle, enterprises in these industries should be actually evaluated according to the income method.

The income method is not widely used in practice. During the negotiation with the appraisal company, the appraisal company did not involve the income method.

Third, market comparison method

The market comparison method refers to similar real estate market values, that is, based on the same location, the same location, the same nature (state-owned, collective), and the same purpose (commercial, industrial, residential), commercial housing includes residential and commercial purposes. In the process of practice, you need to pay attention to what kind of land it belongs to, and refer to the value of land of the same nature within the scope of the attached land, mainly referring to the value of similar real estate markets.

Fourth, hypothesis development method

1. The hypothetical development method is rarely used in practice. The Yingting Demolition Group has handled such a case. The developer, in turn, communicates with the government as the demolished person, and must use the hypothetical development method for actual evaluation. The developer needs to use the land for actual development. The purpose of the land development may be commercial, residential, or factory buildings, and the land development needs to be used to meet the main requirements of the development. Therefore, it is necessary to estimate the value of the land after development, deduct the corresponding taxes and fees, the corresponding losses after land use, etc., and reflect the market value.

2. Many small and medium-sized enterprises hope to apply the hypothetical development method, especially for some unused land, that is, the developer has not actually used it after purchasing it. When the developer is still applying for approval of planning and other related documents, the behavior of occupying the land should be evaluated using the hypothetical development method. If the company relocates, how to evaluate the value of the remaining land? A hypothetical development approach must be used to assess the value of land use rights.

Fifth, the benchmark land price correction method

1. The benchmark land price correction method is mainly an evaluation method used when evaluating the actual location of land. Determining the correction coefficient and the final value based on the location of the land is not widely used in practice. In practice, we commonly use the top-up cost method and the market comparison method for evaluation. However, our lawyers would like to remind small and medium-sized enterprises that if they generate relatively high profits and are in high value-added, labor-intensive, or technology-patented industries, and whose prospects are expected to grow exponentially, they must conduct an income method evaluation.

2. If it is an artificial intelligence parts company, the patented technology in the entire industry can only be matched by certain foreign companies, and most of the products are sold abroad. Such enterprises must use the income method to assess their losses from production and business suspension. Because there may be financing and debt this year, and there may be large income next year. If it calculates its loss from production and business suspension for a certain period, it must follow the income method.

Yingting reminds you:

Even if the same appraisal company chooses different appraisal methods, the appraisal results will be very different. Which evaluation method is chosen directly determines the amount of resettlement compensation. If the demolished person has objections to the assessment report, he or she should apply for review in a timely manner, or ask a lawyer to intervene in the assessment process and participate in negotiations. The demolished persons must apply for review within 10 days of receiving the assessment report. If you are not satisfied with the review result, you can consult a lawyer who has in-depth research on demolition assessment and adopt appropriate methods to safeguard your legitimate rights and interests.