Land Department Valuation

[jrbkk64]

Hi All,

Just bought a second hand condo for 3.4 million. The owner is responsible for all taxes and transfer fees. When she went to the land department they told her the value is 3.7 million and that may even go up with the new valuations becoming effective soon.

How common is this? And does it mean that, at least at first sight, it is a good buy?

[quiksilva]

It will mean that your transfer fees will be higher though, as they will be based on the higher value which would be the governments assessment in this case not the transaction price.

Government values are almost always different to true open market levels. They can be higher or lower, depending upon when the land department made their last assessment. This stands to reason seeing as they have so much ground to cover with their limited resources.

Edit: is it a good buy, well maybe, maybe not. If you want a true measure of open market value, nothing beats knowing how much other similar units have recently sold for in the same building.

Edited January 2, 2008 by quiksilva

[jrbkk64]

It will mean that your transfer fees will be higher though, as they will be based on the higher value which would be the governments assessment in this case not the transaction price.

Government values are almost always different to true open market levels. They can be higher or lower, depending upon when the land department made their last assessment. This stands to reason seeing as they have so much ground to cover with their limited resources.

Edit: is it a good buy, well maybe, maybe not. If you want a true measure of open market value, nothing beats knowing how much other similar units have recently sold for in the same building.

The owner pays all transfer fees. This is the first time I have ever come across a valuation by the Land Dep. being higher than the actual purchasing price.

The same units on lower floors (no river view) with some very minor refurbishment done by the building owner (probably cost less than 500k) in the same building sold for 4.3-4.9 million in the past 6 months. Mine is on the 28th out of 30 floors and will most likely always have at least some river view even when the build another high one right in front of it.

To make it up to my standards I will probably have to spend another 2 million.

[quiksilva]

Sounds like a deal to me, good luck with it!

[Irene]

Hi All,

Just bought a second hand condo for 3.4 million. The owner is responsible for all taxes and transfer fees. When she went to the land department they told her the value is 3.7 million and that may even go up with the new valuations becoming effective soon.

How common is this? And does it mean that, at least at first sight, it is a good buy?

It is unusual for the valuation of the land department pre-2008 to be higher than the concluded value. It happened to me only once out of many transfers I did. It turned out to be a good buy. It is even so when the latest value for 2008 is higher by 50%. However, this is not proof of the pudding. As one writer said it is the actual buyer paying that price that counts. But it has an indirect influence on your higher value to sell in future.

The official value is set up only to preclude a collusion of a buyer and a seller to declare too low the price of land in order to reduce the transfer fees.

[jrbkk64]

Thanks all. Today the Land Dep. confirmed their valuation at 3.7 million for 2008. All in all I think it is a good buy, esp. once the sukhumvit sky train extension is ready early 2009.