An overview of the enquiries on the issue of apportionment of value between land and improvements

In the literature and in the practice of real estate evaluation, there are various opinions about whether or not the value of a property should (and can be) separated into two components: land and building. This paper supports separability and illustrates this with an empirical example using the hedonic approach and detailed data from the City of Montreal (Canada). Existing methods simply provide approximate results on separation and rely only on the use of vacant land transactions. The hedonic method presented here provides reliable and coherent results from the use of the total price of a property split into two independent systems of prices for the land and for the improvements by considering their specific attributes.