Determining the Taxable Value: A Step-by-Step Process

When it comes to establishing property taxes, one of the most important stages is determining the taxable value. This value represents the calculation basis used by the authorities to establish property taxes and related liabilities.

However, the process may appear complex to those unfamiliar with the methodology behind it. For this reason, Activ Property Services explains each stage of the process, providing a clear and detailed overview of the steps required to ensure an accurate valuation that is fully aligned with current legislation.

What Is the Taxable Value

The taxable value is the amount used by the tax authorities to calculate the property tax. It is established through a rigorous valuation process conducted in accordance with specific standards, including those issued by ANEVAR—the National Association of Authorised Romanian Valuers.

In the case of buildings, the taxable value reflects the property’s characteristics, including its location, size, physical condition, and functionality.

Based on this value, the local authorities determine the amount of property tax that the owner must pay annually.

It is important to note that the taxable value differs from the market value, as each serves a distinct purpose. Market value reflects the estimated price at which a property could be traded, while the taxable value is established specifically for tax calculation purposes.

The Role of Activ Property Services in Determining the Taxable Value

Activ Property Services has extensive experience in valuing properties for taxation purposes and operates in accordance with all ANEVAR regulations and applicable legislation.

Our team of professional valuers prepares accurate reports that serve as the basis for calculating property taxes. These services are essential for companies, individuals, and local authorities seeking to ensure that property taxes are calculated correctly and fairly.

Below, we explain step by step how this process is carried out by Activ Property Services.

1. Document Preparation and Preliminary Data Collection

The first stage consists of collecting all relevant documents related to the property being valued. These may include:

• Ownership documents and cadastral records;
• Building plans and sketches;
• Information regarding recent improvements, such as renovations or modernisation works;
• Accounting documents.

This preliminary information is essential for the valuer to understand exactly what is being assessed and to prepare for the physical inspection of the property.

2. Property Inspection

Once all the necessary documents have been collected, the Activ Property Services team conducts a physical inspection of the property.

This stage is essential for establishing the property’s actual condition, as the available documents may not always reflect recent modifications or the building’s current state.

During the inspection, the valuers examine:

• The condition of the building and its level of maintenance;
• The construction materials used and their quality;
• The utility and functionality of the spaces, whether the property is commercial, residential, or industrial;
• Any deficiencies or issues that could influence the taxable value.
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3. Market and Economic Data Analysis

Following the inspection, the next stage involves analysing the real estate market and the local economic environment.

Activ Property Services uses up-to-date market data to determine how economic factors influence the value of the property. This analysis includes:

• The evolution of property prices in the relevant area;
• Supply and demand in the local market;
• Urban development trends.

By comparing the property being valued with similar properties located in the same area, valuers can determine an accurate value that reflects current market conditions.

4. Valuation Approaches Applied

To determine the taxable value, Activ Property Services valuers apply one or more valuation approaches, depending on the type of property and the purpose of the valuation.

The most commonly used approaches include:

Cost Approach

This approach involves estimating the value of the property based on the cost required to rebuild or replace it, less the accumulated depreciation recorded over time.

It is frequently applied to new buildings or properties that have recently undergone renovation or modernisation works.

Market Approach

The market approach involves comparing the property being valued with similar properties in the same area that have recently been sold or are available on the market.

Factors such as size, building condition, location, and technical characteristics are taken into consideration.

Income Approach

For income-generating properties, such as office buildings, shopping centres, or industrial facilities, Activ Property Services valuers may apply the income approach.

This method involves estimating the property’s value based on the income it is capable of generating over a specific period.

5. Determining the Final Value and Preparing the Valuation Report

After applying the appropriate valuation approaches and analysing all the information collected, Activ Property Services valuers determine the final taxable value.

This value represents an accurate assessment supported by facts and objective data. The final report includes all relevant details regarding the property inspection, market analysis, valuation approaches applied, and the reasoning supporting the concluded value.

The report is presented in a clear and detailed format, making it easy to understand for both the property owner and the tax authorities.

This document is essential for the accurate calculation of property taxes and may help prevent potential disputes with the relevant authorities.

6. Updating the Taxable Value

It is important to note that the taxable value may change over time.

Factors such as alterations to the property, improvements, modernisation works, or fluctuations in the real estate market may influence the value established for taxation purposes.

Activ Property Services recommends periodically updating the valuation to ensure compliance with current legislation and to accurately reflect the property’s characteristics and value.

Determining the taxable value is a complex process that requires professional expertise and close attention to detail.

Activ Property Services provides professional property valuation services in accordance with all ANEVAR regulations, delivering accurate and properly documented valuation reports.

Whether you are a property owner seeking to better understand how property taxes are calculated or a company looking to assess its real estate assets for taxation purposes, you can rely on Activ Property Services for a comprehensive and detailed valuation.