Property valuation when comparable sales are made in form of corporate transactions

Abstract: The legislative amendment that came into effect in 2003 meant tax free sales of business-related shares. The amendment allows for packaging of real estate in companies where the company's shares are sold tax free. Sale of limited companies is not public information, which posed a problem for property valuers because they no longer have the same access to location-priced data. This study aims to investigate if the property valuation has changed with respect to that information regarding a company transfer of real estate is not public. Ten interviews were conducted to obtain the basis for the study. The interviewees were selected to represent a broad perspective from different parts of the real estate market. It is established that all major property transactions is conducted as corporate transactions resulting in a difficulty for property valuers. Property valuation has become more extensive as the comparable sale is done as corporate transactions. Property valuers spend more time with the information collection and the analysis of comparative sales. Cash flow method and location price method is determined as the most common valuation methods. Cash flow method can sometimes considered a reconstruction after the event and cash flow method can also be seen as a location price method. Property valuers need full information about a transaction to be able to use it as comparison. This leads to the valuers consider themselves to have more knowledge than they can report. Interview responses indicate that transparency has declined due to the fact that the information retrieval has become more difficult.