Eignarverð

Eignarverð is the monetary value assigned to an asset that is owned, with particular emphasis on real estate in Icelandic practice. It functions as a basis for property taxation, mortgage collateral, and accounting records. The value is not necessarily the same as the price paid at sale, nor a free-market snapshot; rather, it is an official or professional valuation that may be updated periodically.

Valuation process and authorities: In Iceland, eignarverð for real estate is prepared by licensed valuers or municipal valuation offices. Common methods include the sales comparison approach (using recent prices of similar properties), the income approach for rental properties, and the cost approach (replacement cost adjusted for depreciation). The chosen method depends on the property type and data availability. The resulting value may be used as the tax base and as collateral in lending, among other uses.

Determinants: Location, size, age and condition, improvements, and current market conditions influence eignarverð. Other factors include planning restrictions, accessibility, neighborhood characteristics, and recent sale prices of comparable properties. Values are typically reviewed periodically and can be appealed if stakeholders believe they are inaccurate.

Limitations: As with any valuation, eignarverð is an estimate and subject to data quality and market dynamics. Time lags between data collection and publication can cause discrepancies with current market prices, and disputes may lead to revisions through formal processes.