What does the term "Value in Use" refer to?

The term "Value in Use" refers specifically to the value of a property to a particular owner or user, considering how that property meets their individual needs, goals, and circumstances. This concept emphasizes the subjective nature of value, which can differ significantly from the market value derived from comparable sales.

Value in Use takes into account the unique attributes and personal circumstances that influence how someone perceives the worth of a property. For example, a property may have a high value to a business owner for operational purposes, even if its market value based on current sales trends is lower.

In contrast, other definitions like market value focus on broader comparisons without considering personal utility, while terms such as estimated selling price and replacement cost deal with more objective assessments related to sales and construction rather than individual needs and usage. Thus, recognizing the distinction of Value in Use is crucial for appraisers and property owners alike, as it can significantly affect investment decisions and property valuations.