8 criteria for selecting an object, and criteria is what should be captured in the
valuation model for each type of property. Different criteria for selecting property result in that land for industry is
more attractive in some areas, while land for residential purpose in other areas. The influence of location is captured in value maps, with zones showing different
market value levels. Each type of value object has a value map, and each zone on the value map is connected to a table, describing how the value for a specific
value object or unit should be assessed. The value map, together with tables for all market levels, represents the valuation model for each type of value objects
[INLA Project, 2003].
2.2. Principles of Land Valuation
2.2.1. Concept and Principles of Value
Hidayati et al. [2003] argued that anticipation, changes, demand and supply, substitution and balancing are the principles that influence land value of
the area. The meaning of this anticipation is the value produced by profit expectation that will be acceptance in the future. The competition between buyers
in marketing for a site will give the prices position for the land zone of the area. Demand and supply for a site in certain location of area liable balance, if supply is
decrease and demand is constant then the price going to increasing, and also the differing. This principle can not apply in the short term, if the site type very
difficult to find in certain location in the area then the pressure from the market competitor will increase to the site price of the area until the profit indication
level. The substitution principle explains that a buyer will not pay more for a
9 certain site compare to another site in the area. While principle balance is the
factor or variable that influence to the land value when occur the changes to the elements that influence to the balance.
2.2.2. Principles of Valuation
Assessor identifies properties to give the value and determine the date valuation, the valuation objective, the valuation definition and its scope, and
stated on valuation report. Next step is selection and analyze to the data comparator. Include in the valuation process is identification to all properties
attribute, legal aspect, physical characteristic, and extent all the potency on the site [Hidayati et al, 2003].
Gwartney [1999] argued that the collected data should be verified with two different sources. Market data should be verified with a person directly involved
in the transaction. For example, one party could be the selling agent representing the responsible for the sale. Another party could be the site user who agrees to the
sale amount. Additional sources might be government land agents or officials who have first hand knowledge of the sale. Inaccuracies can also be brought to light by
concerned citizens if the data is made available to the public. Nevertheless, in Indonesia it is reality that terminology of valuation is
connoted with several institutions attached with their respective interests. For instance, PBB relates to taxation, BPN terms valuation for expropriation, while
banks define valuation in term of credits, etc. The main valuation methods used by PBB are in correspondence with
international standards. But the non-transparent market makes the application of
10 these methods difficult. The NJOP for land decided by PBB are much lower than
market values. In average these values are around 40 of the market values [INLA, 2003].
PPAT are dealing with the transactions. The reported prices are registered. PPAT never examines the sales to find out if the reported prices are the real prices
or not. It is not PPAT duty. In general reported prices are lower than market prices but sometimes higher than NJOP.
The banks do land valuation for credits. In so doing they use information from notaries and brokers. They also interview people living in the neighborhood
of object for valuation. The banks also build their own databases but some of these databases have not been in digital form yet. The capacity of borrower is
more important than valuation object. To value objects for credit with the amount of loan exceeds Rp. 2 billion some banks will use a private valuation company to
do this activity. Brokers and developers conduct land valuation for their own or on demand
of customers. The broker in Depok profiles more as an investor and partly also as developer. As an actor in market these entities should have sound knowledge
regarding market, and practically they did not use any specific methods other than knowledge of valuation. Developers usually calculate backwards to find out how
much they can pay for the land. They start to calculate the receipts and costs for the whole project. Costs for the land will be a part of the total costs.
BPN do land valuation for expropriation. The valuation methods for expropriation are not regulated but the most common way is to try to find sales of
comparative properties. Other authorities are also involved in valuation for
11 compensation. If there is agricultural land with perennial plants, agricultural office
will account additional values of the trees or plants for compensation purposes.
In general for many centuries, the role of valuation has been an activity associated with government activity, especially in relation to taxation and property
acquisition for public works. With the industrial revolution and capitalism, the development of major
urban areas and increasing demand for housing of workers streaming from the country-side to work in factories, it produced some new faces: industrialists and
developers. The people needed financial assistance using land as collateral and the lenders needed advice about the value of that collateral. The valuation was born
and it has continued up to the present to be an important part of the property finance business although it is rarely very noticeable to those outside the business
area.
2.3. Principles for Land Value Zones
