In the allocation method for land value estimation, what component is deducted from the total property value?

In the allocation method for land value estimation, the replacement cost of the structure is deducted from the total property value to isolate the land's value from the overall property value. This is based on the principle that the total property value consists of both the land and any improvements made to it, such as structures.

By subtracting the replacement cost of the structure, assessors can accurately determine the value attributable solely to the land. This is particularly important in property valuation because land typically has a different value appreciation trajectory compared to improvements, and understanding the land value separately helps ensure more accurate assessments and equitable tax evaluations.

Considering the other options, while they may provide relevant information in different contexts, they do not directly relate to the allocation method for estimating land value as described. For instance, market value of neighboring properties focuses more on comparative analysis rather than allocation. Depreciation cost of land improvements pertains to understanding the diminishing value of added features rather than direct land value estimation. Net income from property sales is related to the earnings generated by the property, which does not specifically assist in extracting the land value from the total valuation of the property itself.