Valuation of Agricultural Land Regulations, 2023

L.N. 60 of 2023

AGRICULTURAL LEASES (RELETTING) ACT

(CAP. 199)

Valuation of Agricultural Land Regulations, 2023

IN EXERCISE of the powers conferred by article 19(1A) of the

Agricultural Leases (Reletting) Act, the Minister responsible for

justice, with the concurrence of the Minister responsible for

agriculture, has made the following regulations:-

(1) The title of these regulations is the Valuation of

Agricultural Land Regulations, 2023.

commencement.

(2) The scope of these regulations is to establish a standard

valuation method that shall be applied to all valuations of the open

market value of agricultural land.

(3) These regulations shall come into force within two (2)

months from their publication in the Gazette.

(regulation 3)

Calculating the Fair Price of Agricultural Land

1. For the purposes of this Schedule, the following

abbreviations shall refer to

a.

AgrVal – Agronomic Value

b.

AgrValMax – Maximum Agronomic Value

c.

BVAL – Basic Value of Agricultural Land

d.

FPAL – Fair Price of Agricultural Land

e.

ProVal – Protected Cropping Value

f.

ProValMax – Maximum Protected Cropping Value

g.

StrVal – Agricultural Structure Value

h.

SumAgr – Total Sum of Agronomic Factors of the

Land

i.

SumPro - Protected Cropping Structure

j.

ValStr - Value of the Structure

The total agronomic factors to be assessed in accordance with

these regulations shall be comprised of the total agronomic value, the

total protected cropping value and the total agricultural structures as

follows

In determining the total agronomic factor, any enhancements or

investments made by the lessee up to eight (8) years from the date of

the assessment shall not be included in the assessment of the

agronomic factors.

The fair price of agricultural land (FPAL) shall be calculated as

follows

FPAL = (Area of land x (BVAL/1124)) + (Area of land x

(AgrVal/1124)) + (Area land covered by Protected Cropping x (ProVal/

1124) + StrVal

(a)

Calculating the Agronomic Value (AgrVal)

The Maximum Agronomic Value (AgrValMax) shall be set

at seventy per cent (70%) of the Basic Value of Agricultural Land

(BVAL). This is allocated to the agronomic aspects of the land and

shall be assessed on the factors identified and listed in paragraph (a) of

Schedule II.

The assessment shall be conducted by experts in the field

who shall give a nominal value to each factor based on the guidance

provided in Schedule II. The total sum of the agronomic factors of the

land (SumAgr) allocated shall be included in the formula below to

determine the Agronomic Value (AgrValue)

AgrVal = (AgrValMax X SumAgr)/100

(b)

Calculating the Protected Cropping Value (ProVal)

The Maximum Protected Cropping Value (ProValMax)

shall be set at thirty-five per cent (35%) of the Basic Value of

Agricultural Land (BVAL). This coefficient is allocated to the state of

the permanent structures that may be used to grow crops under these

structures.

The assessment of the state of the Protected Cropping

Structures shall be assessed on the factors identified and listed in

paragraph (b) of Schedule II. The value allocated to the assessment of

the Protected Cropping Structure (SumPro) shall be included in the

formula below to determine the Protected Cropping Value (ProVal)

ProVal = (ProValMax X SumPro)/100

(c)

Agricultural Structures

(i) Calculating the replacement cost of the

agricultural stores present on the agricultural land with a

footprint of 60m 2 or less (StrVal)

The calculation of the replacement cost of the agricultural

store present on the agricultural land with a footprint of sixty square

metres (60m 2 ) or less shall be linked to the BVAL with a maximum

allocation of seventy per cent (70%) of the BVAL. There shall be four

(4) categories of agricultural stores in accordance with paragraph (c)

of Schedule II. The highest allocation shall be allocated to agricultural

stores having a footprint of more than forty square metres (40m 2 ). The

other allocations shall be calculated as per the formulas present in the

table of paragraph (c) of Schedule II.

(ii) Structures with a footprint exceeding sixty square

metres (60m 2 ) shall be subjected to a calculation of the

replacement value of the structure (ValStr), using a cost approach

as defined in the European Standard Valuations established from

time to time and calculated as following

StrVal = (ValStr)/2

(1)

In these regulations, unless the context otherwise

requires

"Act" means the Agricultural Leases (Reletting) Act;

"base value" means the value of one (1) tumolo of

agricultural land as established by the Minister responsible for

agriculture in accordance with regulation 4;

"total agronomical factors" means the sum of all land

related agronomical factors as identified and calculated in

accordance with Schedule I;

"tumolo" means a measure of land area equivalent to one

thousand one hundred and twenty-four square meters (1124m²).

(2) Unless the context otherwise requires, words and phrases

used in these regulations which are not defined herein shall have the

same meaning as assigned to them in the Act.

Agronomic Factors

(a)

Assessment of Agronomic Factors of the Land

Score

Assigned

Justification for the

Parameter

Guidelines

value

score

assigned score

range

Land with no vehicular

access (only through a

footpath of less than 3m

wide)

Land with vehicular

Parcel

access of at least 3m

0 / +10

accessibility

wide

in

restricted

periods of the year.

Land with unrestricted

vehicular access of at

least 3m wide.

Land without direct

access to new water.

Land without direct

Access to new

access but with new

0 / +10

water

water accessible within

a distance of 500m.

Land with direct access

to new water.

Land with no direct

access to electricity.

Land without direct

access but with

Access to

2.5

electricity accessible

0 / +5

electricity

within a distance of

500m.

Land with direct access

to electricity.

Parcel is within the

coastal

zone

as

identified in the Coastal

Zone and Marine Area

Police.

Parcel is within a

distance of 1km from

the coastal zone as

Exposure to

identified in the Coastal

0 / +10

strong winds

Zone and Marine Area

Police.

Parcel is further than a

distance of 1km from

the coastal zone as

identified in the Coastal

Zone and Marine Area

Police.

Area of parcel is less

than one (1) tumolo or

less than 5m wide.

Area of parcel is more

than one (1) tumolo but

Ease of use of

less than 5m wide.

agricultural

0 / +10

Area of parcel is more

machinery

than one (1) tumolo and

more than 5m wide.

Area of parcel is more

than three (3) tumoli

and more than 5m wide.

Land with a slope

gradient of more than

10%

Land with a slope

Slope

0 / +5

2.5

gradient of between 5%

and 10%

Land with less than 5%

slope gradient.

Risk of flooding in

more than once in three

(3) years.

Risk of flooding in

Flooding

0 / +5

more than once in three

2.5

(3) years and once in

nine (9) years.

No risk of flooding.

Land with more than

25%

protected

landscape features u,

jew >50% of the

perimeter of the field

has rubble walls.

Presence of

fixed elements

Land with 5% to 25%

0 / +10

of the

protected

landscape

landscape

feature.

Land with less than 5%

protected

landscape

feature and, or <50% of

the perimeter of the

field has rubble walls.

Fields with soil depth of

less than 30cm in depth

Fields with soil depth of

Soil depth

2.5

more than 30cm but

0 / +5

less than 50cm in depth

Fields with soil depth of

more than 50cm depth

Soil

Classified

as

"Clay, sand, silt."

Soil

Classified

as

"Loamy sand, sandy

Soil texture

loam, silt loam, sandy

2.5

0 / +5

class

clay loam, silty clay

loam, silty clay, sandy

clay."

Soil

Classified

as

"Loam, clay loam."

Soil salinity more than

4000uS/cm

Soil salinity > 2000uS/

Soil salinity

2.5

0 / +5

cm < 4000uS/cm

Soil salinity less than

2000uS/cm

Soil top layer (15cm

from

surface)

containing more than

35% stones of > 6cm

Soil top layer (15cm

from

surface)

Presence of

2.5

containing between 5%

0 / +5

stones

and 35% stones of >

6cm

Soil top layer (15cm

from

surface)

containing less than 5%

stones of > 6cm

< 50% of the perimeter

of the field has a

boundary wall.

Boundary

0 / +5

walls

> 50% of the perimeter

of the field has a

boundary wall.

No water storage (less

than 1000m³) or access

to groundwater.

Presence

of

water

reservoir with more

than 1000m³ with no

access to ground water.

Water storage

0 / +10

infrastructure

No water reservoir with

more than 1000m³ with

access to ground water.

Presence

of

water

reservoir with more

than

1000m³

with

access to ground water.

Total sum of agronomic factors of the land (SumAgr)

(b)

Assessment of Protected Cropping Structures

No Protected Cropping Structure

present

Protected

Protected Cropping Structure

0 - 25

present however greenhouse is in need

Cropping

of serious repair

Structure

Protected Cropping Structure

0/ +100

25 - 75

present however structure is in need of

repair

Protected Cropping Structure

75 - 100

present and does not need any repairs.

B

(c) Calculating the replacement cost of the agricultural

stores present on the agricultural land with a footprint of sixty

square metres (60m 2 ) or less.

< 15 sq. m

((BVAL X .70)/60) X 15

15 sq. m to 20 sq. m

((BVAL X .70)/60) X 20

20 sq. m to 40 sq. m

((BVAL X .70)/60) X 40

> 40 sq. m

(BVAL X .70)/60

€0.81

(1) The methodology for the valuation of the open

market value of agricultural land shall be calculated by applying the

total agronomical factors resulting on the agricultural land being

valued, to the base value of agricultural land as adjusted to reflect the

actual size of the agricultural land being valued in accordance with

Schedule I.

(2) The total agronomical factors shall be assessed and

determined in accordance with Schedule II.

(3) The base value of agricultural land shall be established in

accordance with regulation 4.

(1) The Minister responsible for agriculture shall Establishment

establish and publish by means of a Government notice in the Gazette of

value of

the base value of one (1) tumolo of agricultural land.

agricultural

land.

(2) The base value of agricultural land shall be revised every

five (5) years from the coming into force of these regulations and each

revision shall be published by means of a Government notice in the

Gazette.

(3) In establishing the base value of agricultural land, the

income approach shall be adopted as established in the European

Valuation Standards published from time to time by the European

Group of Valuers’ Associations in order to determine the open market

valuation of agricultural land based on average net income yields

resulting from data derived from the Farm Accountancy Data Network

(FADN) established by Commission Implementing Regulation (EU)

2015/220 of 3 February 2015 laying down rules for the application of

Council Regulation (EC) No 1217/2009 setting up a network for the

collection of accountancy data on the incomes and business operation

of agricultural holdings in the European Union using the direct

capitalisation method where the capitalisation rate shall be of three per

cent (3%).