The location factor in the calculation of the rural land value in expropriation procedures in Spain

Abstract

The valuation regulations in the context of expropriation in Spain avoid valuation by comparison to prevent discretion, considering the need for market information. Therefore, it defines the capitalization of rents, corrected with a location factor that considers the location rent as the land valuation method. However, a certain lack of precision in the regulations is detected when determining the location factor, so certain aspects to be considered when calculating the location factor are left to the valuer's interpretation. As a result, controversies arise that affect the final value of the calculated location factor, and therefore the value of the land subject to expropriation, between the conflicting parties—the beneficiary and the expropriated party. The GeoValoracion software has been designed as a geoportal, which offers a simple calculation of the location factor, with a detailed description of the interpretation of the parameters and the calculation procedure. Its use in legal procedures can prevent discretionary interpretation and definition by the parties, providing some clarity in calculating the expropriated land value.