Land value index

Land Value Index - The land value index (also known as the land value coefficient) is a key figure in real estate appraisal that indicates the relative value of a parcel of land compared to a reference parcel. It is derived from the soil assessment (arable land index/pasture index) or from standard land values and serves as a correction factor in land value determination when the property being appraised differs from the reference property in significant characteristics.

Determination and Application

The land value index takes into account factors influencing value such as soil quality, property depth, property layout, accessibility, and location quality. In practice, the land value index is frequently used within the framework of the comparative value method: The standard land value of the reference property is multiplied by the land value index to obtain the specific land value of the property being appraised. A land value factor of 1.0 indicates equivalence with the reference property; values above 1.0 indicate a higher land value, while values below 1.0 indicate a lower land value.

Factors Influencing Value in Detail

The most important factors that are incorporated into land value determination via land value factors are:

• Lot depth: Plots that are deeper than average receive a land value ratio below 1.0, as the rear area is often structurally unusable. The Appraisal Committee provides depth-grading tables that govern the exact conversion.
• Plot shape: Highly irregular, acute-angled, or narrow plots are valued with discounts. Rectangular, well-proportioned lots are considered the standard.
• Corner location: Corner lots often have a land value ratio above 1.0 because they offer two street fronts. However, on heavily trafficked main roads, noise and traffic pollution can have a counteracting effect.
• Development: Fully developed properties have a higher land value index than partially developed or undeveloped areas.

Significance for Property Valuation

For buyers and sellers, the land value index is an important tool for placing price negotiations on a factual basis. The standard land value alone is often insufficient, as it refers to a standardized reference property. A corner lot, a rear lot, or a lot with an atypical depth can deviate significantly from the standard value. The land value index quantifies these deviations and makes them transparent.

Factors Affecting Value and Typical Land Value Index Adjustments

Factor	Characteristic	Adjustment Factor (typical)	Explanation
Plot Depth	Normal (15-25 m)	1.0	Standard plot
Plot depth	Very deep (> 40 m)	0.85-0.95	Rear area difficult to develop
Plot depth	Very shallow (< 12 m)	0.80-0.90	Limited developability
Plot Shape	Rectangular, regular	1.0	Standard
Plot Shape	Highly irregular, acute angles	0.75-0.90	New construction difficult
Corner Location (quiet streets)	Two street fronts	1.05-1.15	More sunlight, flexibility
Utilities	Fully developed	1.0	Standard
Utilities	Partially developed	0.80-0.90	Sewer or electricity not yet available
Sloped location (Nuremberg-Ziegelstein)	Steeply sloped	0.85-0.95	Additional foundation costs

Practical tip for property owners in Nuremberg

We recommend that property owners and prospective buyers in the Nuremberg metropolitan area not rely solely on the standard land value when evaluating a property, but also take into account the individual property characteristics through land value figures. The Appraisal Committee of the City of Nuremberg regularly publishes standard land values and conversion coefficients, which serve as the basis for the land value figure. Especially for properties on slopes (e.g., Nuremberg-Ziegelstein) or with an unusual layout, the land value figure can adjust the realistic value by 10-30% above or below the standard value. For a reliable assessment, we always recommend consulting an expert who is familiar with local market data and the recognized conversion coefficients.

Frequently Asked Questions

Where can I find the land value figure for my property?

The land value figure is not published automatically but is determined as part of a property appraisal by an expert or the Appraisal Committee. The standard land values serve as the starting point; these are available free of charge in Nuremberg via the BORIS portal (Bavarian Standard Land Value Information System). The Nuremberg Appraisal Committee also publishes conversion coefficients for common deviations from the standard property value-these are included in the annual real estate market reports and can be requested from the Appraisal Committee.

Is the land value index identical to the arable land index?

No. The arable land index is a measure of a soil’s agricultural productivity and is derived from the land valuation under the Valuation Act. The land value index, on the other hand, is a real estate indicator that specifies the property value relative to a reference property. For agricultural land, however, the arable land index may be factored into the land value index if the land use designation provides for agricultural cultivation.

How does the depth of a property affect the land value index?

For residential building lots, the rule of thumb applies: the front areas, close to the street, are more valuable than the rear areas. For properties that are deeper than average, the land value index decreases, as the rear area is often not suitable for construction. The exact conversion is performed using depth-based tables provided by the respective appraisal committee. In Nuremberg, plots deeper than 30 meters are often harder to market, as the rear area is frequently neither buildable nor suitable for use as a garden.

Especially for large plots in outlying areas of Nuremberg, the land value figure can make the difference between an overvalued and an undervalued purchase price-an investment in an expert appraisal almost always pays off here.

How does rezoning affect the land value figure?

When a property is rezoned from a lower to a higher land use category due to a change in the zoning plan-such as from a purely residential zone (WR) to a general residential zone (WA) or from a residential zone to a mixed-use zone (MI)-the land value index typically increases as well, since the property is now suitable for more intensive development or mixed use. In the Nuremberg metropolitan region, zoning plan amendments occur regularly, particularly in connection with infill development projects and Nuremberg’s urban development initiatives (e.g., the Nordbahnhof area, Südstadt development). Buyers of properties located in planning areas should check the current planning status with the Nuremberg City Planning Office, as ongoing or approved zoning plan changes can significantly alter the land value figure and thus the realistic property value.

Land Value Figure in Inheritance and Gift Tax

When assessing the tax value of land for inheritance and gift tax purposes, the tax office relies on standard land values and land value figures. According to the Valuation Act (§ 179 BewG), the property value for undeveloped land is determined by multiplying the land area by the standard land value-with subsequent adjustments for individual deviations of the property from the standard property. These adjustments correspond methodologically to the land value figure. For heirs and donees in Nuremberg, it therefore makes sense to have an expert establish a lower market value for tax purposes (§ 198 BewG) if the property is valued below the standard land value due to its location, layout, or level of development. Such a comparative value appraisal can significantly reduce the inheritance or gift tax burden and, in many cases, more than offset the appraisal costs.

Back to the Real Estate Glossary.