What does "use value" of a property refer to?

The concept of "use value" refers to the value of a property based on its current use rather than its potential or market value under different circumstances. This means that when assessing use value, an appraiser evaluates the property according to its present function, such as whether it is being utilized as a residential property, commercial space, agricultural land, etc. This approach provides insight into how the property generates economic benefits in its existing state, making it particularly relevant for properties that may not have the highest market value due to less desirable characteristics for other uses.

This distinguishes use value from other types of value assessments, such as market value, which reflects what the property might sell for under current market conditions, or liquidity value, which relates to how quickly a property can be sold in the open market. Historical value, on the other hand, is based on past sales data and does not indicate the property's present contribution or functionality. Overall, understanding the use value is important for appraisers when determining a property's worth for its specific current use.