If you are considering buying or selling land, understanding the actual market price is essential. The actual market price is the price at which land was concluded in a real transaction, and it serves as a benchmark for making an appropriate buying or selling decision. In this article, as specialized knowledge of the real estate market, we explain five ways to research the actual market price and how to calculate it.
What is the actual market price?
The actual market price of land is the price at which a transaction was actually completed when land was bought or sold.Transaction data is provided to the Ministry of Land, Infrastructure, Transport and Tourism, and details such as land price, size, and building conditions are published as actual market price information.
What are the five ways to research the actual market price?
1. Transaction price information from the Ministry of Land, Infrastructure, Transport and Tourism
You can search past transaction prices in the "Land General Information System." Information on land size, shape, and the frontage road can also be checked.
2. Calculate from the fixed asset tax assessment value
You can calculate it from the assessed value shown on the annual tax notice. The formula is "assessed value ÷ 0.7 × 1.1."
3. Calculate from the official land price and benchmark land price
Use the normal land price published each year by the Ministry of Land, Infrastructure, Transport and Tourism (official land price) or by prefectural governments (benchmark land price) as the basis. The formula is "official land price × area × 1.1."
4. Calculate from the road price
This method calculates the price from the road price published each year by the National Tax Agency. The formula is "road price assessment value (road price × area) ÷ 0.8 × 1.1."
5. Appraisal by a real estate company
You can learn a price that is closer to actual market conditions than by researching it on your own.Because you can have them estimate a price that could be sold within three months, this is ideal for people considering a sale or purchase in the near term.
What should you keep in mind when researching the actual market price?
- The price derived from a formula is only a guideline and may differ from the actual transaction price
- Land prices change continually, so be sure to check the latest data
- It is important to compare results using multiple methods
Frequently Asked Questions (FAQ)
Q. What is the difference between the actual market price and the official land price?
The official land price is a benchmark price set by the government, while the actual market price is the real transaction price. In general, the actual market price is said to be about 1.1 times the official land price.
Q. Where can I check the actual market price?
You can search for it free of charge in the Ministry of Land, Infrastructure, Transport and Tourism's "Land General Information System." You can specify the prefecture and municipality to review past transaction examples.
Q. If I know the actual market price, can I know the exact selling price?
The actual market price is a reference value, and the actual selling price can vary depending on negotiations and the condition of the property. If you want to know an accurate price, request an appraisal from a real estate company.
