Property Valuation
What is 'allocation method' for land valuation and when is it used in Hawaii?
AA. A method allocating property tax assessments between land and improvements
BB. Estimating land value as a percentage of total property value based on typical land-to-value ratios for similar improved properties; used when comparable vacant land sales are unavailable✓ Correct
CC. A method allocating value between different land uses on the same parcel
DD. A government method used only for conservation district land valuation
Explanation
The allocation method estimates land value by applying a typical land-to-total value ratio derived from market analysis. For example, if comparable improved properties in a neighborhood typically show 30% land value/70% improvement value, and the total property is worth $800,000, land might be estimated at $240,000. It is less reliable than direct comparable land sales but useful when vacant land comparables are scarce.
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