Evaluating a plot is more demanding than rating a condominium. While apartments can be quickly assessed based on comparable offers, the value of a plot depends on a dozen factors: standard land value, development status, buildability (GFZ/GRZ), location, zoning, contamination risks, and not least the planned use. An 800 m² building plot can cost 2.8 million euros in Munich-Bogenhausen — the same plot in Lusatia might cost only 24,000 euros. A factor of 100. This guide shows you how to methodically and accurately determine the market value of a plot, which methods are permissible in which situations, and how developers and investors calculate backwards from the selling price to the maximum land price.
What determines the value of a plot of land? The 7 core factors
Before we get to the methods: The value of a plot of land is not a single value, but a corridor. Within this corridor, seven levers shift the realistic selling price by 30–80 %.
Value Factor
Impact on Land Value
Example
Development Status
Factor 5–20×
Arable land 8 €/m² → buildable 450 €/m²
Location (Macro/Micro)
Factor 10–100×
Munich 2,500 €/m² vs. Görlitz 25 €/m²
Buildability (GFZ/GRZ)
±20–50 %
GFZ 0.4 vs. 1.2 → more than double the value
Land Size
±10–25 %
Over-sized → discount, as it is hard to sell
Layout & Topography
−15 to −30 %
Sloping land, snake-shaped plot
Corner Plot / Head-of-Street Location
+5 to +15 %
Better lighting, advertising effect
Contamination / Building Restrictions
−20 to −80 %
Contaminated soil, right of way, utilities
Insider tip: The development status is the biggest value lever of all. Between arable land and buildable land, there is often a factor of 20. Whoever finds a plot with a good rezoning perspective has the highest return lever in the real estate market.
Development stages: from farmland to buildable land
Agricultural and forestry land: 0.50–15 €/m² — no building perspective
Farmer’s land: 20–80 €/m² — location in the land use plan, but no B-Plan
Rough buildable land: 40–60 % of the buildable land value — B-Plan available, development missing
Understanding standard land value: reading BORIS correctly
The standard land value is the average location value in euros per square meter, determined by the independent valuation committees of the municipalities (§ 196 BauGB). Free of charge accessible via the state portals (BORIS NRW, BORIS Bavaria etc.). More details on the standard land value of an unbuilt plot.
The standard land value is, however, only the starting value — it refers to a “reference plot” with defined characteristics (e.g., 600 m², GFZ 0.4, buildable). If your plot deviates from this, it is corrected using conversion coefficients.
Calculation example: Land value of an 800 m² building plot
Position
Value
Plot size
800 m²
Standard land value (reference plot 600 m², GFZ 0.4)
450 €/m²
Base value (800 × 450)
360,000 €
Correction for oversize (coefficient 0.93)
−25,200 €
Surcharge for GFZ 0.6 instead of 0.4 (coefficient 1.18)
+60,300 €
Corner plot surcharge (+8%)
+31,600 €
Adjusted land value
426,700 €
Important: Standard land values are updated every two years. In dynamic markets, the actual market value can be 20–40 % above the last standard land value. Therefore, always cross-check with current comparable sales.
The three standardized rating methods — and when each applies
The ImmoWertV (Real Estate Valuation Ordinance) mandatorily regulates the rating. It replaced the old Valuation Ordinance (WertV) and today unifies terms and procedures for privately commissioned and officially appointed experts as well as valuation committees. An overview of all valuation methods for real estate can be found in the linked hub.
Sale revenue minus construction costs minus margin
Residual value method: How a developer calculates
The most important — and most underestimated — method for investors. The developer works backward: What can I achieve at the end with the completed apartments? From that, he subtracts all costs. What remains is the maximum plot price.
Example: 1,000 m² plot, GFZ 1.0 → 1,000 m² floor area → approximately 800 m² sellable living space.
Sale revenue from apartments: 800 m² × 6,500 €/m² = 5,200,000 €
Construction costs (KG 300+400, approx. 3,200 €/m² GFA): −3,200,000 €
If the standard land value is higher, the project does not pay off. If it is lower, there is a margin on top. This calculation is the reason why developers often pay a bit more than private buyers — they generate value through development. More on the return logic in the article Real Estate Return and when calculating the purchase price factor.
Market value, loan value, asset value — clearly distinguishing terms
In practice, values are often confused. This table sorts them out:
Value Type
Definition
Who determines it?
Market Value (Market Value)
Price likely to be achieved in normal business dealings (§ 194 BauGB)
Appraiser, real estate agent, experts
Loan-to-Value
Sustainable value, usually 70–90 % of the market value
Bank / Mortgage Bond Act
Asset Value
Substance value (land value + building value)
Experts
Unit Value
Tax-related auxiliary value (significantly below market value)
Tax Office
Land Value
Value of pure land without structures
Appraisal Committee / Experts
standard land value
Average location value per m² (§ 196 BauGB)
Appraisal Committee
Location, location, location — and what it really means
The term is used inflationarily, but rarely broken down. When determining value, two location levels are distinguished:
Macro Location
Economic strength of the region (unemployment rate, purchasing power index)
Local supply (kindergarten, school, shopping, doctor within <1 km)
Public transport connectivity (distance to S-/U-Bahn)
View, lighting, neighboring properties
Important: Planned infrastructure (new U-Bahn, school construction, industrial area) often affects the rating years before completion — if the planning has been politically decided.
Land register extract: what appraisers and buyers must check
The land register extract is the legal basis for every rating. It contains the complete “ownership history” and all encumbrances. It can be requested from the land registry office — however, only by the owner or a person with proven interest. More in the article Land register entry.
Entries that reduce the value and must alarm every appraiser:
Right of way / pedestrian and vehicle access rights of third parties (Section II) — up to −15 % value reduction
Utility rights for service providers — development restrictions in the protected strip
Right to reside / usufruct — can block the sale in practice
Ground lease — owner is the plot, but not the building
Land charges / mortgages (Section III) — must be cleared before sale
Right of first refusal of the municipality according to the Building Code
Development charges (in a separate register of development charges) — setback areas, parking space charges
Tax aspects when buying and selling a plot
When evaluating, one should consider the tax aspect — it significantly changes the net yield of the business.
When buying:Land transfer tax (3.5–6.5 % per federal state), notary fees, land register — total
