Land is an expensive and limited commodity. That’s why many people use land as an investment because it is valuable. Because of this value, people often have different views on how to calculate the price of land. Mostly, the price of land per meter is calculated according to the market price in an area. It make the way of knowing the price of land in an area is different.
Some of you might be confused about how the land is calculated and how much it costs in certain area. Whether it is appropriate or has been increased by the realtor. Or even too cheap because the land is in trouble?
How to Know the Price of Land
Actually, how to calculate the price of land is very easy because there are guidelines on it. As an item that has legality, land is subject to Land and Building Tax (PBB) every year.
The basis used to draw this tax is the price of the land. Local governments usually determine the price of a land with the term Sales Value of Taxable Object (NJOP). Well, NJOP in an area can be different from other areas. How? Let’s elaborate on some ways of knowing the price of this land.
1. According to NJOP
To understand the meaning of this NJOP, we need to refer to where the term comes from. NJOP is the government’s medium of determining the tax base. Whether this is for buying and selling, or if there’s going to be eviction compensation. Usually, the price of land is calculated according to NJOP.
So, what is this NJOP basically? The legal basis of NJOP is in law number 28 of 2009 concerning Local Taxes and Retributions.
In the provisions of that rule, NJOP is the average price obtained from buying and selling transactions that occur properly. If the land does not have a sale and purchase agreement, then the NJOP is determined through a price comparison with other similar objects, or the value of a new acquisition, or a replacement of NJOP.
Usually, there is a list of land prices per meter at NJOP. It can be used as a way to determine the price of land in an area. As an owner or agent of property, it is important for you to manage the assets that you have.
2. Survey on Market Price
NJOP can be used as a basis in determine the price of land. But in the property market, the price may exceed the benchmark price in NJOP. It is because the market price is determined by demand and supply.
If there is more demand, the price will go up or be more expensive than before. Meanwhile, if there are many people offer the land, the price of the land can fall. Observing the prices of land around us will help us to know the price of land easily. So, we can understand how to determine the price of land in an area.
3. According to the Facility
The price of land is also determined based on the location, whether it is strategic or not. This aspect usually refers to the availability of public facilities and social services.
For example, for residential areas, strategic facilities such as schools, markets, hospitals, pharmacies, central parks, toll roads, railway stations, and others are needed. For commercial property, it usually concerns business services. For example, a port, airport, government office, or business center (Central Business District).
Well, that’s three ways to calculate the price of land. If you want to buy a plot of land, you can use one of the above ways. Or you can also use a combination of the three. By understanding how to calculate the above land prices, you will find the best price of land.