Possibilities of house valuation automation in the Czech Republic

Abstract

Valuation of single-family detached houses is necessary when determining the amounts of some taxes. The current systems of the Czech Republic are outdated in this respect, and they are based on procedures used in the 1980s. The values found do not correspond to current market conditions very often. This article attempts to verify the applicability of a methodology where the value of a detached house is decomposed into the value of the land and the value of the object as such when considering wear. For verification, 122 sales of detached houses in Ostrava and its surroundings were analyzed, and the results show that the values determined by the verified methodology do not differ by more than 10% from the actual sales prices in most cases. The methodology is very simple and practically applicable for users without deep knowledge of construction or valuation principles. It can be applied, for example, when calculating the bases of certain taxes or as an indicative guide for the pricing of real estate for sellers, buyers, real estate agents, etc.