Texas Property Tax Consultant Practice Exam

What does the term "excess land" mean in property appraisal?

1. Land that is needed for development

2. Land that does not contribute to the highest and best use

3. Land that is located adjacent to income-producing property

4. Land that is unavailable for immediate use

The correct answer is: Land that does not contribute to the highest and best use

In property appraisal, "excess land" refers to land that exceeds the amount necessary to support a property's highest and best use. This means that the portion of land classified as excess does not significantly contribute to the value or functionality of the property as utilized. For instance, if a commercial building is situated on a lot larger than what is needed for its operations, the additional land may not enhance the property’s income potential or usability. To appraisers, this designation is crucial because it affects how the land is viewed in terms of market value; essentially, excess land can be valued separately from the primary property if it does not contribute to the overall income generation or functional utility. The other interpretations do not accurately capture the essence of what excess land signifies in appraisal. Excess land does not simply mean land needed for development, nor is it limited to being adjacent to income-producing property. Also, the term does not specifically refer to land that is unavailable for immediate use, since such land may still hold potential or have value.