Difference Between Assessed Land Price and Roadside Value
Both assessed land prices and roadside values are indicators of land value, but they differ in purpose and calculation method. Learn about their characteristics and how to use them appropriately.
Difference Between Assessed Land Price and Roadside Value
Among the words related to land prices, "Officially Assessed Land Price" and "Roadside Value" are often heard, but what is the difference between these two? This article explains their characteristics and how to use them.
What is Officially Assessed Land Price?
The Officially Assessed Land Price is a survey of the normal price of standard land as of January 1st each year, published by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) around March.
Main Features
- **Publishing Authority**: Ministry of Land, Infrastructure, Transport and Tourism
- **Survey Date**: January 1st of each year
- **Publication Period**: Around March each year
- **Number of Survey Points**: Approximately 26,000 points nationwide
- **Purpose**: Benchmark for general land transaction prices
Calculation Method
Real estate appraisers conduct on-site surveys and calculate appropriate transaction prices. This price represents a "normal price," which is a reasonable price that would be established in the market.
What is Roadside Value?
Roadside Value is published annually by the National Tax Agency as a benchmark for calculating inheritance and gift taxes.
Main Features
- **Publishing Authority**: National Tax Agency
- **Survey Date**: January 1st of each year
- **Publication Period**: Around July to August each year
- **Coverage**: Land facing major roads
- **Purpose**: Calculation basis for inheritance and gift taxes
Calculation Method
Roadside Value displays the price per square meter of a standard residential plot facing a road in units of 1,000 yen. The actual inheritance tax assessment value is calculated by multiplying this roadside value by various correction factors.
Main Differences Between the Two
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Reasons for Price Difference
Generally, Roadside Values tend to be set lower than Officially Assessed Land Prices. This is due to the following reasons:
1. **Tax Safety**: To avoid overburdening taxpayers
2. **Different Calculation Methods**: Roadside values are set lower considering various factors
3. **Different Evaluation Criteria**: Roadside values are for inheritance tax evaluation
Which Should You Refer To?
When considering buying/selling land
→ Refer to **Officially Assessed Land Price**. It tends to be closer to market price.
When estimating inheritance tax
→ Use **Roadside Value**. Because it's the assessment value recognized by tax authorities.
When wanting to know asset value
→ Refer to **both**. Comparing the two indicators gives a more accurate market understanding.
Summary
Officially Assessed Land Prices and Roadside Values generally have different assessment values even for the same land. This is because each indicator has a different purpose.
When you want to know land prices, it's important to choose the appropriate indicator according to your purpose. Also, understand that these official prices are benchmarks, and actual transaction prices may vary based on individual conditions.