What does the principle of contribution measure?

The principle of contribution measures the value of a component based on its contribution to the overall value of the property. This principle suggests that the worth of any particular component or improvement is directly related to how much it adds to the total value of the entire property. For instance, if a homeowner installs a swimming pool, the principle of contribution would evaluate how much this pool increases the property's market value compared to the cost of installing it.

Understanding this principle is crucial for property tax consultants, as it helps in accurately assessing the value of properties and determining fair taxation. By recognizing how individual components affect the whole, professionals can provide better advice and support for property owners regarding their property taxes and improvements.