ACTUAL USE - the use to which the property is principally or predominantly devoted.
ASSESSMENT - the procedure or methodology for arriving at assessed value.
ASSESSMENT LEVEL - a percentage of market value prescribed by law at which the assessed value is determined.
ASSESSED VALUE - value of real property for realty tax purpose which is arrived at by multiplying market value by assessment level.
CAPITAL ASSET - property not constituting inventory for sale, or property not used in connection with trade, business, or source of income.
CAPITAL GAINS TAX - income tax payable to the Bureau of Internal Revenue for the sale, transfer, or other disposition of real estate classified as capital asset.
ORDINARY ASSET - property constituting inventory for sale, or property used in connection with trade, business, or source of income.
TRANSFER TAX - a tax payable to the local government unit for the sale, transfer, or other disposition of real estate, whether capital or ordinary asset.
WITHHOLDING TAX - a tax payable to the Bureau of Internal Revenue on the sale, transfer or other disposition of real estate classified as ordinary asset.
APPRAISAL - the process of estimating the value of real estate or any interest therein as of a given time and for a specified purpose.
BUYER’S MARKET - a condition obtaining in an area at a certain time when there are many properties for sale while there are few buyers, in which case price tends to go down. Supply is more than demand.
CONFORMITY, PRINCIPLE OF - an appraisal principle which holds that value of a property tends to be enhanced when there is reasonable homogeneity in utilization.
CONTRACT RENT - the rental stipulated to be paid in a lease contract.
CORNER INFLUENCE - the added desirability or utility of a lot due to ties frontage to parallel and perpendicular streets.
COST APPROACH - a method of estimating the fair market value of an improvement by estimating present reproduction cost and deducting depreciation.
DEPRECIATION - loss in value to physical deterioration, functional obsolescence, or economic obsolescence.
ECONOMIC RENT - the potential rental which a property can command, taking into consideration the rate of nearby or comparable properties.
ENCROACHMENT - the displacement of an existing use by a non-conforming use, such as the introduction of a factory in a residential area.
ECONOMIC LIFE - the period during which a property can be profitable used, or the period during which a building is expected to generate more income than operating expenses.
INCOME APPROACH - the process of estimating the fair market value of a commercial property by capitalizing its annual net income.
INCREASING AND DIMINISHING RETURNS, PRINCIPLE OF - states that the application of more factors of production will tend to increase net income up to a certain point, beyond which the introduction of more factors of production will tend to decrease net income.
INFILTRATION - the displacement of present residents by people of lower economic status or different cultural or social background.
MARKET ANALYSIS - study of current supply and demand conditions in a particular area for a specific type of property.
MARKET DATA APPROACH - a process of determining fair market value of a land by comparing it with nearby or comparable properties which were subject of recent sales or offerings, making positive or negative adjustments depending on whether the comparatives are superior or inferior based on certain adjustment factors.
MULTIPLIER EFFECT OF REAL ESTATE - states that real estate is considered a "spark plug" which triggers activities in allied industries, creates income opportunities for different private sectors, and enhances the market for construction materials, furnitures, and appliances.
OVER-IMPROVEMENT - an improvement which is not suitable to the site on which it is placed because of excessive size or cost.
PROGRESSION, PRINCIPLE OF - an appraisal principle which holds that the value of a property tends to be enhanced by association with superior properties.
REGRESSION, PRINCIPLE OF - an appraisal principle which holds that the value of a property tends to be adversely affected by association with inferior properties.
REAL ESTATE - land and all permanent improvements thereon.
SELLER’S MARKET - a condition prevailing in an area as of a given time when there are few properties for sale against many buyers, in which case price will tend to go up. Demand is more than supply.
SUBSTITUTION,PRINCIPLE OF - an appraisal principle which holds that the value of a replaceable property is inferred from the value of an equally desirable substitute properly. This is based on the assumption that no prudent buyer will pay more than what it will cost him to acquire an equally desirable substitute property.
UNDER-IMPROVEMENT - an improvement which is not suitable to the site on which it is placed because of deficient size or cost.
UNEARNED INCREMENT - increase in value of real estate without any effort or expense by the owner.
VALUE - in the economic sense, it refers to the power or attribute of a property to satisfy humane want; in appraisal, it is the present worth of future benefits arising from ownership of a property.
