Do you own or inherit farmland and wonder what it's really worth? An evaluation based purely on emotion can quickly cost you several thousand euros per hectare when selling or leasing. This guide shows you how to precisely determine and optimise the financial value of your agricultural land through a systematic assessment.
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The topic briefly and concisely
The assessment of agricultural land is primarily based on the comparison method and the income method, which are often combined.
The soil quality, expressed by the agricultural index (scale 7-100), is the most important value driver and significantly influences the price per hectare.
Official land reference values provide an initial orientation but must always be adjusted for location-specific factors such as position, layout, and alternative use potentials (e.g., for solar parks).
The value of agricultural land has increased by more than 150% over the past ten years, but many owners do not know the true drivers behind this development. A professional agricultural land appraisal is more than just a glance at the regional average price. It is a strategic necessity to make informed decisions on inheritance, sale, or leasing and to avoid financial losses. We explain the crucial valuation factors – from soil quality to EU subsidies – and show you how to maximize the return from your property, supported by clear metrics and proven practices.
Summary: 3 Key Points of Area Assessment
A comprehensive agricultural land valuation is the foundation for any financial decision involving your farmland. It protects against unrealistic price expectations and creates a solid basis for negotiation. Accurate valuation ensures you receive fair terms, whether selling, leasing, or using the land as collateral.
Market Value vs. Yield Value: The market value (transaction value) is based on current sale prices of similar plots in the region, while the yield value reflects the potential profit from farming. Both are crucial for a comprehensive assessment.
Soil quality is crucial: The soil index, ranging from 7 to 100, is the most important individual factor. A deviation of just 10 points can influence the value by several thousand euros per hectare.
Use official reference values: The soil reference value, published at least every two years by appraisal committees, provides an initial guideline but must always be adjusted to reflect the specific characteristics of your property.
These three pillars form the foundation to not only understand the value of your land but also to manage it strategically. The following analysis delves deeper into these aspects and provides you with practical tools.
Comparative value and income value: The two central valuation methods
To accurately determine the value of agricultural land, two recognised methods dominate practice. The comparison value method is the most common approach and analyses actual purchase prices of properties in the vicinity. Valuation committees use this data to derive the market value. In Bavaria, for example, the range of purchase prices in 2023 extended from 26,642 euros in Upper Franconia to 133,085 euros in Upper Bavaria.
The second essential method is the income value method. Here, the focus is not on the sale price, but rather on the sustainably achievable net yield generated by the land. This yield is capitalised over a specific period to determine the value. This method is particularly relevant when the land is actively cultivated or serves as a long-term capital investment. A professional fundamental assessment for valuation is indispensable here. Both methods are not mutually exclusive; often, only their combination provides a realistic picture.
Value drivers in detail: soil, location and lease
The price of agricultural land is determined by a range of tangible factors that extend far beyond just the area itself. A precise understanding of these drivers is essential for a realistic valuation of agricultural land.
The key factors are:
Soil quality (arable or grassland index): This is the most important factor. The soil index, which describes yield potential on a scale from 7 to 100, is defined within the land valuation framework. Soils with values above 60 are considered very good and command premium prices.
Location and infrastructure: Proximity to markets and processing facilities reduces transport costs and enhances profitability. Good transport links can increase the value by up to 15%.
Compactness and layout: Large, contiguous, and well-laid-out areas are easier to manage and thus more valuable than small, fragmented plots.
Lease conditions: Existing lease agreements and the locally customary rental prices affect the value. The average rental price in Germany was 357 euros per hectare in 2023.
Water availability: Drainage systems, wells or the possibility of irrigation are significant value-enhancing factors in times of climate change.
Legal conditions, such as potential contamination or environmental regulations, also play an increasingly important role and must be examined.
The Role of Standard Land Values and Official Data
The standard land value is an official average value determined by local expert committees and provides an important initial orientation for the valuation of agricultural land. It is specified per square metre and refers to a defined zone with largely uniform value ratios. These values are usually updated every two years and are publicly accessible, for example, via the BORIS systems of the federal states.
However, the standard land value is only an average and does not reflect the specific characteristics of your property. Deviations in soil quality, layout or development must be factored in by applying surcharges or discounts. For an accurate valuation, it is therefore essential to use the standard land value as a starting point and to make an individual adjustment. A professional appraisal does precisely this and can deliver a value up to 20% more accurate. If you are unsure how to interpret this data, our ImmoGPT chat can provide an initial free assessment.
Specialized Crops and Energy Industry: Additional Value Potentials
Not every agricultural area is pure arable or grassland. Often, unused potentials lie dormant here, which can significantly increase the value. A forward-thinking agricultural land assessment therefore also includes alternative possibilities for use. Areas suitable for special crops such as wine, fruit, or asparagus can achieve a revenue value 50-100% higher than classic arable land.
Another massive value driver is the energy transition. The suitability of an area for photovoltaic or wind power systems can increase the lease price by 10 to 20 times. However, evaluating such potentials requires specialized expertise regarding development plans, grid connection points, and approval procedures. The conversion into ecological compensation areas is also becoming increasingly important for companies and municipalities, creating new sources of income for owners. An analysis of these special property factors is therefore a crucial step in maximizing value.
Conclusion: Data-driven evaluation as a strategic advantage
The days when the value of agricultural land was estimated with a handshake are over. A precise, data-driven evaluation of agricultural land is no longer a luxury, but a necessity for every owner. The price trends of recent years show that the German agricultural market has become more complex and competitive. The average purchase value nationwide in 2023 was 33,430 euros per hectare, an increase of over 8% compared to 2020.
Whether you're looking to fairly divide an inheritance among heirs, optimally prepare a sale, or simply know the current value of your assets – a neutral evaluation protects you from costly mistakes. It provides you with the facts you need for a strong negotiating position. Make use of the possibilities of a digital and AI-supported analysis to gain clarity quickly and objectively. Request your non-binding valuation offer now and make decisions based on data, not just gut feeling.
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Additional useful links
The Federal Statistical Office (Destatis) provides a special analysis of the purchase values for agricultural land.
Through the BORIS system, you receive official information on land reference values.
The Thünen Institute conducts research on the determinants and impacts of developments in agricultural land markets.
The Federal Agency for Nature Conservation provides information about nature conservation in agriculture.
The Federal Environment Agency offers comprehensive information on land saving and the preservation of soils and landscapes.
The Chamber of Agriculture regularly publishes press releases on current topics in agriculture.
The German Farmers' Association presents its positions on various agricultural policy topics.
FAQ
What documents do I need for an assessment of my agricultural land?
For an accurate assessment, a current land register extract, a cadastral map, information on soil quality (if available, e.g., from soil evaluation), details on existing lease agreements, as well as any permits for drainage or construction, are typically required.
Are there any taxes if I sell inherited farmland?
That depends on whether the farmland is considered private or business assets and how long it was owned by the deceased. In the case of private assets, the sale is tax-free after a holding period of ten years. For business assets, more complex rules apply, often within the framework of inheritance tax.
What is the difference between market value and yield value?
The market value (or market price) is the price that could currently be achieved in a market sale. The income value is based on the future, sustainably achievable profit from the management of the area. Both values are important for a complete analysis.
How do EU subsidies affect the value of my farmland?
EU direct payments granted per hectare often influence and support rental and purchase prices. On average, there is about 280 euros per hectare per year, which makes the land more attractive to farmers and investors and tends to drive prices up.
Why should I use a professional appraisal instead of a simple online estimate?
Online calculators often only use average data such as the standard land value. A professional assessment by experts like Auctoa considers all individual, value-influencing factors such as the exact layout, infrastructure, legal peculiarities, and alternative utilisation potential, resulting in a significantly more precise and often higher value.
My farmland is leased. How does this affect the sale value?
An existing lease agreement can impact the value both positively and negatively. Long-term contracts with good returns can be attractive to investors. However, contracts with very low rent or a short remaining term can reduce the value, as the new owner cannot immediately use or re-lease the area themselves.
