Ask a non-valuer what a property is "worth" and they expect a single number. Ask a valuer, and the honest first answer is a question: worth to whom, and for what purpose? The same building can carry several entirely different, entirely correct values on the same day — depending on which basis of value you are measuring.
Choosing the right basis is not a technicality. It is the most consequential decision in a valuation, because it defines what the number actually means. Use Market Value where Investment Value was needed, and the figure is precise, defensible, and wrong for the client's purpose. This guide explains each basis defined in the International Valuation Standards, when to use it, and the one naming confusion that trips up even experienced practitioners.
Bases of value are governed by the International Valuation Standards (IVS). In the 2025 edition, effective 31 January 2025, they sit in IVS 102 — note that this moved from IVS 104 in the previous edition, so older references and templates may cite the wrong chapter. On the RICS side, the requirement to select and clearly state the basis of value lives in VPS 2 of the Red Book. (For the full picture of how the Red Book is structured, see our practitioner guide to RICS Red Book compliance.)
The standards do two things here. They define a set of recognised bases so that "Market Value" means the same thing to a valuer in Singapore and a lender in London. And they require you to state, explicitly and in advance, which basis you are using — because a number without its basis is ambiguous at best and misleading at worst.
The default basis for most real-property valuations. IVS defines Market Value as the estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction, after proper marketing, where the parties each acted knowledgeably, prudently and without compulsion.
Every phrase carries weight: willing (neither forced), arm's-length (unconnected parties), proper marketing (adequate exposure to the market), without compulsion (no special urgency). Market Value is what most clients mean by "what's it worth" — a hypothetical, market-derived figure independent of any particular buyer.
The leasing counterpart of Market Value. It is the estimated amount for which an interest in property should be leased on the valuation date between a willing lessor and willing lessee on appropriate lease terms, in an arm's-length transaction after proper marketing. The lease terms matter enormously — Market Rent on a full-repairing-and-insuring lease is not the same number as Market Rent on a lease with different obligations, which is why the assumed terms must be stated.
The value of an asset to a particular owner or prospective owner, for their individual investment or operational objectives. Unlike Market Value, it is entity-specific: it reflects that buyer's own cost of capital, tax position, portfolio synergies, or strategic plans. Investment Value is the right basis when the question is "what is this worth to me?" — for an acquisition decision, for example — rather than "what would the market pay?" The two can diverge sharply, and that gap is often exactly the information a client needs.
The estimated price for transferring an asset between two specific, identified parties that reflects the respective interests of those parties. It is broader than Market Value: it considers what is fair between these two particular parties, who may not be the hypothetical willing buyer and seller of the open market. Equitable Value is common where there is no open-market exposure — a transfer between related companies, or a buy-out between shareholders.
Sometimes called marriage value or merger value. It is the additional value created when two or more assets or interests combine to produce a value greater than the sum of the separate values. The classic example: two adjoining plots, each modestly valuable alone, that together enable a development neither could support individually. The synergy belongs to the combination, so the basis has to be stated carefully — it is not what either party would achieve on its own.
The amount realisable when assets are sold on a piecemeal basis, reflecting the costs of getting them into saleable condition and the costs of disposal. It can be assessed under an orderly liquidation (a reasonable marketing period) or a forced sale (compressed timescale, often well below Market Value). A forced sale, strictly, is a circumstance rather than a basis — the standards are clear that "forced sale value" is not a basis of value in itself, but Market Value or Liquidation Value assessed under the special assumption of a forced disposal.
"Fair Value" is where even seasoned valuers get caught, because the term means two different things depending on the context.
If a client asks for "fair value," the single most useful thing you can do is ask which one they mean. The answer changes the basis, the definition, and potentially the figure.
The pattern to notice: Market Value and Market Rent ask "what would the open market do?"; Investment Value asks "what is it worth to this specific party?"; Equitable Value asks "what is fair between these two parties?"; Synergistic Value asks "what does the combination create?"; and Liquidation Value asks "what could be realised if we had to sell now?" Same asset, six legitimate questions, six different answers.
The Red Book does not leave the basis of value to inference. VPS 2 requires it to be appropriate to the purpose, explicitly identified, and properly defined in the terms of engagement and the report. This is not bureaucracy — it is what makes the figure usable. A lender, a court, or an auditor reading your report needs to know whether they are looking at an open-market figure or a worth-to-a-specific-party figure, because they will rely on it very differently.
This is also where a spreadsheet-and-Word workflow quietly fails: nothing in a blank template prompts you to confirm that the stated basis matches the purpose, or carries that basis consistently through to the report. (We wrote about that gap in valuation software vs. spreadsheets.) In InterVal, the basis of value is a structured field captured up front and carried through the assignment, so the report cannot drift from the engagement. You can see how that reads in the finished documents in our sample reports.
"What's it worth?" has no single answer until you fix the basis of value. Market Value, Market Rent, Investment Value, Equitable Value, Synergistic Value and Liquidation Value are not interchangeable synonyms — each answers a different question, and the standards exist so that everyone reading your report knows exactly which question you answered. Get the basis right, state it explicitly, and the rest of the valuation has firm ground to stand on. Get it wrong, and a perfectly executed valuation can still be the wrong tool for the client's job.
This guide is provided for general information and reflects the standards in force at the date of publication. Definitions are summarised; always refer to the current edition of the International Valuation Standards and RICS Valuation – Global Standards for the authoritative wording, and to guidance applicable in your jurisdiction.
Why most valuation practices still run on Word and Excel, where that workflow quietly costs you — version chaos, silent formula errors, compliance drift, no audit trail — and when a structured platform is worth the switch.
What the RICS Red Book requires in practice: the 2025 edition's six VPS explained stage by stage, the most common compliance failures, and a practical checklist for defensible valuation files.
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