You have probably heard of the terms ‘Tax Assessment’ and ‘Commercial Appraisal’ before. However, you still, most likely, don’t know exactly what they are for and what the differences between them are.
The Internal Revenue Service (IRS) is used to assess or rate real estate with the intention to set Territorial Tax or so-called Contributions.
The evaluation is valid for 5 years; it readjusts due to changes of the property and the half-yearly change of the Consumer Price Index (CPI).
It manages technical variables according to the management of municipal works. Also, depending on whether it is an agricultural or non-agricultural property, land classification tables are also managed. Furthermore, connectivity, basic services, building, quality and materiality of housing are also overseen.
The Commercial Appraisal is determined by the market price and is carried out for trade. The factors that decide the commercial property valuation refer to analysing all the physical, economic and social variables that affect the value of a property. Examples would include, average sales price relative to the sector, surplus value, accessibility, type of building, urbanization, construction, aspirational perception, seniority, luxuries, mortgage appraisal, etc.
What’s the difference?
Commercial Appraisal is given by the market and is carried out in order for trade. On the other hand, Tax Assessment corresponds to the appraisal of real estate made for tax purposes.
Translated from ‘Avalúo Fiscal vs Tasación Comercial ¿Cuál es la diferencia?‘