HOW TO VALUE A PROPERTY OF TEMPLE FOR SECURITY

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Message from B K Aruna-05/11/2024
D/o, B Kanagasabapathy

Question from a fellow valuer:

A temple trust has constructed a residential building and they’ve approached me for valuation. I understand that temple properties are non-marketable and, therefore, I should not certify the value. Could you please guide me on this matter?

Opinion:

You have not mentioned the exact purpose of the valuation. The appropriate value to be certified depends on the purpose of the valuation, which is crucial here:

1. For Primary Security: If the purpose is to obtain a loan (e.g., for a housing loan to fund new construction), you may certify the construction cost. In this scenario, the bank is focused on the construction cost rather than the marketability of the property.

2. For Income Tax: If the valuation is required for income tax, you can proceed with certifying the cost of construction. The value of land is not in the scope here.

3. For Collateral Security: If the valuation is for collateral security purposes, certifying the market value is not advisable. Temple properties are generally considered non-marketable, making them unsuitable as collateral.