How to Calculate Land Value for Tax Purposes

Property taxes are based on the county assessor's valuation of the land.

Property taxes are based on the county assessor's valuation of the land.

Calculating the value of a piece of land value is sometimes necessary for the purpose of estimating taxes. The method by which you calculate and report land value, however, varies by the type of tax. Whether you want to estimate annual property tax, the tax on the sale of land, or taxes related to a gift of land, each purpose has a different method.

Contact the county assessor for your most recent assessment to use in estimating property tax. State and local governments have specific rules regarding land valuation for tax assessment purposes.

Add up the purchase price and cost of any improvements to determine the cost basis if selling the land.

Subtract the cost basis from the total benefit you receive from the sale of the land to calculate taxable gain.

Find the fair market value for the land if you are going to make a gift of land. Contract an assessor to value the land or look up price quotations for similar properties.

Subtract the annual gift exemption from the higher of the fair market value or your cost basis to determine any taxable gift.

 

About the Author

Sean Butner has been writing news articles, blog entries and feature pieces since 2005. His articles have appeared on the cover of "The Richland Sandstorm" and "The Palimpsest Files." He is completing graduate coursework in accounting through Texas A&M University-Commerce. He currently advises families on their insurance and financial planning needs.

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