How to define land value?

Land value can be defined as the monetary cost of the land. It can be the cost of undeveloped land or a
built property, but land value is primarily associated with a vacant plot. When discussing the importance of
a built structure the term “property value” is more appropriate.
Factors affecting Land Value – Important for comparison

The land value is determined by the economic principle of highest and best use of land which produces
the highest net return in any term, over a period. The property value is dependent on the structural
attributes, land rates, land use and the location of the land. It is determined by the specific character of
the land such as land use, location, accessibility, aesthetics, etc. Factors affecting Land Value are of
importance to calculate or estimate land prices, understanding of these factors will provide more accurate
and realistic cost of land. These factors affecting Land Value do not necessarily give the exact amount but
are helpful in comparison.

Factors affecting Land Value mainly include the following:

1. Physical attributes: These include quality of location, topography, climate, availability of water, sewer
lines, etc. More and better facilities are attributed to a higher price of land. Topography further has a direct
effect on the construction cost and thus the overall development cost. The facilities thus developed on an
uneven land will have a much higher cost as compared to the flat plain.

2. Accessibility to economic activities: The more easily economic activity is accessible, the more is the
value of the land. For example, most of the metropolitan cities have the maximum land values at the
center, or at the central business district of the city. This is because of the nearness to the economic
activities and workplace. This factor affecting land value is the sole most important factor which led to the
development of various land price models in urban economics.

3. Neighborhood amenities: The cost of land is also affected by the availability of the facilities such as
shopping areas, medical facilities, school, parks& playgrounds, and other basic need of the humans. This
helps in saving the time of people every day, the time saved adds up the cost of land. Also, the reduced
travel and reduced trip distance will directly have the monetary benefits of the person residing in an area
with many such facilities in proximity.

4. Present and future land use: The value of the land is also determined by the land use permitted in the
land premises. For example, if we compare the values of two lands of same prices and same location but
the land use permitted in the lands are different, one is commercial and one is residential. In such case
the value of the land with the land use which has more rate of return over a period of time will be valued
more. People are willing to pay a higher amount for commercial land, in some cases industrial or
institutional land use might attract even higher prices.

5. Demand and Supply Function: With the significant demographic changes in the cities with time, the
need for land also increases with the same factor, with the increase in population there is an increase in
economic and other activities. This directly increases the demand in the of the land components. The
anticipation of high yields may also induce false scarcity of land; hence the location advantages of the
properties at any time within the urban boundaries and hence causes economic values of land to be
increased. For any site, there are specific points of transition in use, closely related to the infrastructure
and services, where a jump in property value is likely to happen.

6. Location and Transport Linkages: The property located in the area of high level of infrastructure
facilities or the one located in or adjacent to the area of intensive economic activities such as markets or
industries have higher values. Transport linkages are also crucial since they govern the mobility & ease of
movement to and from the area. Clearly defined hierarchy of roads, efficient public transportation and lack
of congestion are some of the desired transportation attributes of any area. Residential land values are
also observed to be in direct proportion to the hierarchical order of the adjacent road.

The valuation of land is done keeping in mind the factor mentioned above; however, the actual selling
price of an area is ultimately determined by the paying capacity of the buyer. All the factors mentioned
above-affecting land value might give a price which no one is willing to pay, and thus the actual amount
paid becomes the price instead of the evaluated price.

Land-use planning is the process of regulating the use of land in an effort to promote more desirable
social and environmental outcomes as well as a more efficient use of resources. Goals of land-use
planning may include environmental conservation, restraint of urban sprawl, minimization
of transport costs, prevention of land-use conflicts, and a reduction in exposure to pollutants. By and
large, the uses of land determine the diverse socioeconomic activities that occur in a specific area, the
patterns of human behavior they produce, and their impact on the environment.
In urban planning, land-use planning seeks to order and regulate land use in an efficient and ethical way,
thus preventing land-use conflicts. Governments use land-use planning to manage the development of
land within their jurisdictions. In doing so, the governmental unit can plan for the needs of the community
while safeguarding natural resources. To this end, it is the systematic assessment of land and water
potential, alternatives for land use, and economic and social conditions in order to select and adopt the
best land-use options.[1] Often one element of a comprehensive plan, a land-use plan provides a vision for
the future possibilities of development in neighborhoods, districts, cities, or any defined planning area.
In the United States, the terms land-use planning, regional planning, urban planning, and urban
design are often used interchangeably, and will depend on the state, county, and/or project in question.
Despite confusing nomenclature, the essential function of land-use planning remains the same whatever
term is applied. The Canadian Institute of Planners offers a definition that land-use planning means the
scientific, aesthetic, and orderly disposition of land, resources, facilities and services with a view to
securing the physical, economic and social efficiency, health and well-being of urban and rural
communities.[2] The American Planning Association states that the goal of land-use planning is to further
the welfare of people and their communities by creating convenient, equitable, healthful, efficient, and
attractive environments for present and future generations
Land-use planning often leads to land-use regulation, which typically encompasses zoning. Zoning
regulates the types of activities that can be accommodated on a given piece of land, as well as the
amount of space devoted to those activities, and the ways that buildings may be situated and shaped.

Land use planning is defined as: the process by which optimum forms of land use and management are
indicated, considering the biophysical, technological, social, economic and political conditions of a
particular territory. The objective of planning land use is to influence, control or direct changes in the use
of land, so that it is dedicated to the most beneficial use, while maintaining the quality of the environment
and promoting conservation of the land resources. The territorial diagnosis and the generation of
alternatives of management and environmental protection for the planning of the use of the land produces
the indispensable knowledge necessary for the formulation of the policies of use, contributing to the
search of competitive and sustainable productive and extractive activities and systems. The
methodological process of land use planning contributes to: orienting the location of economic and social
activities regarding the aptitude of the land and providing solutions to conflicts of use; indicate the base of
natural resources that should remain and protected areas; point out the areas exposed to natural hazards
and their management; identify sustainable productive and extractive activities and systems; guide the
planning of land uses and indicate the areas that require land adaptation or recovery projects.

In most countries, the local municipal council/local government, the body responsible of the Environment
and oftentimes the national government assume all the functions of land use planning; among them the
corresponding function to territorial ordering (OT). For this reason, the highlighted bodies have among
other responsibilities the promotion of the conservation and sustainable use of natural resources,
establishing policies, criteria, tools and procedures of the most appropriate efficient and sustainable
territorial order in coordination with any other relevant corresponding entities such as construction
companies and the public

Application of Land-use planning[edit]

 "Developing cities and towns": Land use planning is an important component of city planning. The
nature of cities required to the most beneficial use in terms of maximization of economic factors and
promoting convenience, while maintaining the quality of the environment and promoting conservation
of the land. The only way to achieve this is the utilization of the elements of land use planning. [9]
 "The concept of Zoning": Zoning is the process by which areas of land are split into zones by
appropriate establishments within which several users are assigned to each zone. Therefore, this
makes zoning very important modus operandi in land-use planning where it is used to design urban
areas in many countries (Lewis-Roger, 1987). The topic of zoning is considered within the context of
land use planning and design as a systemic perception. Zoning is used as a fundamental component
of territorial planning, which is incorporated in the stages of the logical model of regional
development. In the process of zoning, the actor divides land into units of different sizes, shapes and
locations, according to the characteristics of the terrain and the corporality of a culture
Conditions necessary for Land-use Planning[edit]

1. Community relation: For any land planning activity to be commenced the involved actors must
involve the community or the member of the public in order to put into consideration their
opinions on the proposed land planning initiatives. After all, the land is being planned so that the
public can enjoy the benefits that comes from land use planning.
2. Government and legal support: the government can support land use planning initiatives in a
myriad of ways. The first is by financing or subsidizing a section of land use planning activities.
The second way is by reducing bureaucracy and administration bottlenecks that comes with
obtaining permits and licenses.[9]

Pros and Cons of Land-Use Planning[edit]

Pros[edit]

 Land use planning is an important growth framework: certainly, prosperous urban areas have a vision
that they must follow through a framework to achieve a development in a well-ordered way. Hence,
land use planning provides this framework.[9]
 A well planned urban area is a well-prepared urban area: Anticipating the future allows for better
preparedness.[9] Indeed, the presence of natural phenomenon that represents a threat to human life
activities implies a limitation in the use of land. It is necessary then, to plan the use of the land taking
into account its limitation in order to allow the containment of natural phenomenon and its
manifestations either by restricting the presence of human life and/or activities, adapting
infrastructure conditions in a manner that reduces its vulnerability to natural phenomenon or
implementing plans conducive to risk mitigation. The absence of territorial planning plans, the lack of
definition of areas exposed to threats and the lack of studies on natural phenomena that might bring
threats, ensure an increase in the number and magnitude of disasters of natural origin. The process
of land use planning developed putting into consideration this aspects, allows the identification,
location and evaluation of areas exposed to natural phenomena, hence allowing the implementation
of measures that guarantee risk mitigation.
 Good land use planning positively impacts the development of urban economy.[9]
 Promote the national territorial order and economic ecological zoning as a support for the
conservation, use and sustainable use of natural resources and biological diversity, as well as the
orderly occupation of the territory.
 Incorporate the analysis of natural and anthropic risk in territorial planning processes, as well as
adaptation measures to climate change.
 Promote mechanisms to prevent the settlement of populations and the development of socio-
economic activities in areas with high potential for risks in the face of natural and anthropic hazards.
 Promote territorial planning as a basis for concerted development plans and border development, in
the management of watersheds and coastal marine areas.
 Guides the actions of regional and local governments for the efficient fulfillment of their functions in
this area of land use planning.
Cons[edit]

 The cost of land use planning is usually high.

 Land use planning is often plagued by bureaucracy and administrative bottlenecks.
 Land use planning takes a lot of time.

Types of planning[edit]
Various types of planning have emerged over the course of the 20th century. Below are the six main
typologies of planning, as defined by David Walters in his book, Designing Communities (2007):

 Traditional or comprehensive planning: Common in the US after World War II, characterized by
politically neutral experts with a rational view of the new urban development. Focused on producing
clear statements about the form and content of new development.
 Systems planning: 1950s–1970s, resulting from the failure of comprehensive planning to deal with
the unforeseen growth of post World War II America. More analytical view of the planning area as a
set of complex processes, less interested in a physical plan.
 Democratic planning: 1960s. Result of societal loosening of class and race barriers. Gave more
citizens a voice in planning for future of community.
 Advocacy and equity planning: 1960s & 70s. Strands of democratic planning that sought specifically
to address social issues of inequality and injustice in community planning.
 Strategic planning: 1960s-present. Recognizes small-scale objectives and pragmatic real-world
constraints.
 Environmental planning: 1960s-present. Developed as many of the ecological and social implications
of global development were first widely understood.[6]
 Tenure responsive planning: 2015-onwards. It recognizes that land use planning should be
collaborative but with the purpose of tenure security improvement. This is a hybrid approach whereby
traditional, advocacy, democratic and bottom-up efforts are merged in such a way that they focus
towards tenure security outcomes. Today, successful planning involves a balanced mix of analysis of
the existing conditions and constraints; extensive public engagement; practical planning and design;
and financially and politically feasible strategies for implementation.
Urban planning is a technical and political process concerned with the development
and design of land use and the built environment, including air, water, and the infrastructure passing
into and out of urban areas, such as transportation, communications, and distribution networks.
[1]
 Urban planning deals with physical layout of human settlements. [2] The primary concern is
the public welfare,[1][2] which includes considerations of efficiency, sanitation, protection and use of the
environment,[1]as well as effects on social and economic activities. [3] Urban planning is considered an
interdisciplinary field that includes social, engineering and design sciences. It is closely related to the
field of urban design and some urban planners provide designs for streets, parks, buildings and
other urban areas.[4] Urban planning is also referred to as urban and regional planning, regional
planning, town planning, city planning, rural planning, urban development or some
combination in various areas worldwide.
Urban planning guides orderly development in urban, suburban and rural areas. Although
predominantly concerned with the planning of settlements and communities, urban planning is also
responsible for the planning and development of water use and resources, rural and agricultural
land, parks and conserving areas of natural environmental significance. Practitioners of urban
planning are concerned with research and analysis, strategic thinking, architecture, urban
design, public consultation, policy recommendations, implementation and management.
[2]
 Enforcement methodologies include governmental zoning, planning permissions, and building
codes,[1] as well as private easements and restrictive covenants.
Technical aspects of urban planning involve the applying scientific, technical processes,
considerations and features that are involved in planning for land use, urban design, natural
resources, transportation, and infrastructure. Urban planning includes techniques such as:
predicting population growth, zoning, geographic mapping and analysis, analyzing park space,
surveying the water supply, identifying transportation patterns, recognizing food supply demands,
allocating healthcare and social services, and analyzing the impact of land use.
In order to predict how cities will develop and estimate the effects of their interventions, planners use
various models. These models can be used to indicate relationships and patterns in demographic,
geographic, and economic data. They might deal with short-term issues such as how people move
through cities, or long-term issues such as land use and growth. [14]
Building codes and other regulations dovetail with urban planning by governing how cities are
constructed and used from the individual level.[1

Legal interest
A legal interest refers to the legally enforceable right to possess or use property. The term may
refer to past, present, or future interests.
Legal interest may also refer to:

 Equitable interest, which is a legal interest that may be enforced by equitable remedies
 Estate in land, a possessory interest in real property
 Government interest, the rationale of a government in enacting a law or regulation
 Right to property, the normative concept of entitlement to property
 Other forms of nonpossessory interest in land
An equitable interest is an "interest held by virtue of an equitable title (a title that indicates a
beneficial interest in property and that gives the holder the right to acquire formal legal title) or
claimed on equitable grounds, such as the interest held by a trust beneficiary." [1] The equitable
interest is a right in equity that may be protected by an equitable remedy. This concept exists only in
systems influenced by the common law (connotation 2) tradition, such as New Zealand, England,
Canada, Australia and the United States.
Equity is a concept of rights distinct from legal (that is, common law) rights; it is (or, at least, it
originated as) "the body of principles constituting what is fair and right (natural law)".[2] It was
"the system of law or body of principles originating in the English Court of Chancery and
superseding the common and statute law (together called 'law' in the narrower sense) when the
two conflict".[2] In equity, a judge determines what is fair and just and makes a decision as
opposed to deciding what is legal.
An estate in land is an interest in real property that is or may become possessory.
In the legal systems of almost every country, the ultimate true "owner" of all land is the sovereign [citation
needed]
, which for a republic is the whole people of a society,[citation needed] which with sovereign, exclusive
control over a well-defined tract of land, may be called a "state". Private parties own not the
underlying land, but claims on parcels of land, which taken together define the estate for that parcel.
This superior ownership is the basis for taking the land through eminent domain. However, the
claims that define the estate are themselves personal property.
This should be distinguished from an "estate" as used in reference to an area of land, and "estate"
as used to refer to property in general.
In property law, the rights and interests associated with an estate in land may be conceptually
understood as a "bundle of rights" because of the potential for different parties having different
interests in the same real property.

Categories of estates
Estates in land can be divided into four basic categories:

1. Freehold estates: rights of conveyable exclusive possession and use,

having immobility and indeterminate duration
2. Leasehold estates: rights of possession and use but not ownership.
The lessor (owner/landlord) gives this right to the lessee(tenant). There are four categories
of leasehold estates:

1. estate for years (a term of year absolute or tenancy for years)—lease of any length
with specific begin and end date
2. periodic estate (periodic tenancy)—automatically renewing lease (month to month,
week to week)
3. estate at will (tenancy at will)—leasehold for no fixed time or period. It lasts as long
as both parties desire. Termination is bilateral (either party may terminate at any
time) or by operation of law.
4. tenancy at sufferance—created when tenant remains after lease expires and
becomes a holdover tenant, converts to holdover tenancy upon landlord
acceptance.

Types of leases:
 gross lease
 net lease
 percentage lease
Concurrent estates: owned or possessed by two or more individuals simultaneously.

1. tenancy by the entirety

2. joint tenancy
3. tenancy in common
4. statutory estates: created by law
 community property
 homestead — protection from claim by creditors
 dower—interest a wife has in the property of her husband
 curtesy—interest a husband has in the property of his wife
 Equitable estates: neither ownership nor possession

 Future interests — interests in real or personal property, a gift or trust, or other things in
which the privilege of possession or of enjoyment is in the future and not the present

Right to property
The right to property or right to own property (cf. ownership) is often classified as a human
right for natural persons regarding their possessions. A general recognition of a right to private
property is found more rarely and is typically heavily constrained insofar as property is owned
by legal persons (i.e. corporations) and where it is used for production rather than consumption. [1]
A right to property is recognised in Article 17 of the Universal Declaration of Human Rights, but it is
not recognised in the International Covenant on Civil and Political Rights or the International
Covenant on Economic, Social and Cultural Rights.[2] The European Convention on Human Rights,
in Protocol 1, article 1 acknowledges a right for natural and legal persons to "peaceful enjoyment of his
possessions", subject to the "general interest or to secure the payment of taxes".
Property interest refers to the extent of a person's or entity's rights in property. It deals with the
percentage of ownership, time period of ownership, right of survivorship, and rights to transfer or
encumber property. Some of the types of ownership interests of real property include:

Life Estate - A life estate is where a person owns all the benefits of ownership in the property during their
life, or the life of another, with the property going to a remainder person after the death of the life tenant.

Tenants in Common - This is how two or more people (co-tenants) may take title to property who intent
their share in the property to be separate from the other on death. On the death of the tenant in common
the deceased persons ownership in the property is left to his or her heirs or as specified by Will. Compare
to Joint Tenants. If tenant in common ownership is desired the deed usually provides, "to Grantees, A and
B, as tenants in common and not as joint tenants".

Joint Tenants with Rights of Survivorship - This is how two or more persons may take title to property
when the parties want the entire ownership to go to the survivor instead of the heirs of the survivor. On
death of a joint tenant with rights of survivorship, the entire interest of the deceased co-tenant goes to the
surviving co-tenants. Compare to Tenants in Common. It is common for husband and wife to take title as
joint tenants with rights of survivorship. If joint tenant with rights of survivorship ownership is desired, the
deed usually provides, "to Grantees, A and B, as joint tenants with rights of survivorship and not as
tenants in common".

Legal interest and beneficial interest in property

Land can be owned in two ways: legal ownership, giving the right to the legal interest in the land, and
beneficial ownership, giving the right to beneficial interest in the property. The legal owner of a property is
the person who owns the legal title of the land, whereas the beneficial owner is the person who is entitled
to the benefits of the property. Read this guide to have a clear understanding of the distinction between
legal and beneficial interest.

What is the legal interest in a property?

The legal interest in a property refers to the right to possess or use property. It belongs to the legal owner,
i.e. the person who is registered at the Land Registry on the title deeds. Legal interest gives the owner a
right of control over the property, which means they can decide to sell or transfer the property.

What is the beneficial interest in a property?

The beneficial interest is an interest in the economic benefit of a property. It belongs to the beneficial
owner, who is entitled to the financial value of the land, regardless of the title entries at the Land Registry.
In particular, beneficial interest gives right to :
 live in the property;
 a share of the rental income;
 a share of the proceeds of sale if the property is sold.
The legal owner and the beneficial owner of land may be the same person, but not necessarily. In
particular, legal ownership and beneficial ownership will be separated when two people decide to manage
property through a trust : the legal owner - whose name is registered at the Land Registry - holds the
property 'on trust' for the benefit of someone else, the beneficial owner. We say that the legal owner is the
'bare trustee', whereas the beneficial owner is the 'beneficiary'.

What's the advantage of differentiating legal ownership and beneficial ownership?

When the property is held jointly

Two or more people can decide to buy a house jointly, either as joint tenants (all tenants are equally
entitled to the whole property) or as tenants in common (each tenant is entitled to a specific share of the
property). This is called co-ownership of property, and both partners' names will be registered at the Land
Registry, as legal owners.
However, the joint legal owners of a property may want the beneficial interest to differ from the legal
interest, notably if they want one of the partners to be entitled to a higher share of the rental income. For
example, if A and B are the joint legal owners of a property, they may decide that A has a beneficial
interest in 70% of the property and that B has a beneficial interest in 30% of the property. This will entitle
A to 70% of the rent, while B will be entitled to 30%.
Doing so can provide tax efficiencies, because the taxation of income is based on beneficial ownership,
not on legal ownership. Transferring beneficial ownership to the partner who falls within the lower tax
threshold allows for a larger share of the rental income to be assigned to that partner, and the overall tax
can be minimised. For more information read Buy to let tax implications.
Ask a lawyer if you have any questions regarding beneficial interest splits, in particular if you wish to
transfer 100% of beneficial interest to your partner.

When there is only one legal owner

A sole owner of a property may want their partner (either a spouse, civil partner or cohabitant) to have a
share in the benefits of the property even though they have no legal interest in the property. Giving
beneficial interest to a partner who is not the legal owner enables that partner to receive a share of the
financial value of the land, such as rental income or sale proceeds.

How can beneficial interest be established?

The legal and beneficial ownership of property can be separated using a declaration of trust.
A declaration of trust confirms the beneficial ownership of a property and sets out the respective
beneficial interest of each tenant in common, regardless of the title entries at the Land Registry.

How do you find out who the legal owner of a property is?
The legal owners of a property are registered at the Land Registry and can be searched for on the Land
Registry