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Verkehrswert and market value are legally synonymous – both denote the price that would be achieved for a property in the ordinary course of business. The term "Verkehrswert" is legally defined in Germany under § 194 BauGB, while "market value" is the internationally common technical term with the same meaning.
The statutory definition
According to § 194 BauGB (German Building Code), market value is the price that could be achieved at the time of valuation in the ordinary course of business, taking into account the legal circumstances and actual characteristics, other attributes, and location of the property, without regard to unusual or personal circumstances. This definition is deliberately kept objective: emotional premiums, distress sales, or family relationships between buyer and seller are excluded.
Why two terms for the same thing?
"Market value" (English: Market Value) originates from international valuation standards such as the International Valuation Standards (IVS) or the European EVS standards. As German appraisal reports are increasingly used for international investors, banks, or abroad within the EU, the term "market value" has become established in practice as a synonym. In a market value appraisal under the ImmoWertV, you will therefore often find both terms used side by side.
Distinction from other value terms
The Verkehrswert should not be confused with:
- Purchase price: the price actually agreed upon in a specific sale, which may deviate from the market value.
- Mortgage lending value: a value conservatively set by banks for loan security purposes, usually lower than the Verkehrswert.
- Property tax value: a value determined on a flat-rate basis in accordance with the Valuation Act, exclusively for tax purposes.
For sales, estate settlements, divorces, or submission to the tax office, the Verkehrswert or market value is always decisive – determined by an independent expert appraisal report in accordance with the recognized procedures of the German Real Estate Valuation Ordinance (ImmoWertV).