An undeveloped plot has no floor plan, living space or year of construction – and is therefore more difficult to value than a finished house. Its value lies solely in its potential: in what may be built on it and how much. We explain which factors determine the price of a plot – from buildability and utility connections to the standard land value – and how you can form a realistic picture of its value yourself.
Why plots are valued differently from houses
For an existing property, the value is based on the size, condition and features of the building. An undeveloped plot lacks this reference point. The price results almost entirely from two questions: Where is the plot located – and what can be realised on it? A square metre of building land in a sought-after urban location can cost many times as much as a square metre on the outskirts, even if both plots are the same size.
That is why every serious land valuation begins with planning law. Only once it has been established whether and to what extent construction is permitted can a land value be sensibly determined. All other factors – utility connections, shape and building ground – then act as additions or deductions to this base value.
Buildability: the most important value driver
Whether and to what extent a plot may be built on is determined by public planning law. Three cases must be distinguished:
- Plot within the scope of a local development plan (Section 30 BauGB): Here, the municipality bindingly determines the type and extent of development. The local development plan is the most reliable information on buildability.
- Plot in an unplanned built-up area (Section 34 BauGB): If there is no local development plan, a new building must fit in with the character of the immediate surroundings. The existing neighbourhood sets the framework.
- Plot in an undeveloped outer area (Section 35 BauGB): Areas outside built-up contexts are generally not buildable. Despite their often low price, such plots are usually not building plots for private developers.
You can obtain the local development plan and information on buildability from your municipality’s building authority. Anyone wishing to buy a plot should make enquiries there before making any purchase decision.
GRZ and GFZ: how much you are allowed to build
How the extent to which a plot may be built up is governed by two figures from the Building Use Ordinance: the site coverage ratio (GRZ) and the floor area ratio (GFZ).
The site coverage ratio pursuant to Section 19 BauNVO indicates “how many square metres of ground area are permissible per square metre of plot area”. A GRZ of 0.4 means: On a 600-square-metre plot, 240 square metres may be built over (600 × 0.4). For garages, parking spaces and ancillary structures, this figure may be exceeded by up to 50 percent, but only up to a GRZ of 0.8.
The floor area ratio pursuant to Section 20 BauNVO indicates how many square metres of floor area are permissible per square metre of plot area. With a GFZ of 0.8 and 600 square metres, this results in 480 square metres of floor area across all full storeys – for example, two full storeys of 240 square metres each. The higher the GRZ and GFZ, the more residential or usable floor space can be created, and the more valuable the plot generally is.
Where a development plan does not specify its own figures, the guideline values in Section 17 BauNVO serve as a reference. The upper limits stated there include:
- pure and general residential areas (WR, WA): GRZ 0.4 / GFZ 1.2
- mixed-use areas (MI): GRZ 0.6 / GFZ 1.2
- core areas (MK): GRZ 1.0 / GFZ 3.0
- commercial areas (GE): GRZ 0.8 / GFZ 2.4
Infrastructure: connected or not?
A plot is not truly ready for construction until it has infrastructure connections – meaning it can be reached via a public road and is connected to the sewer system, water, electricity and, as a rule, telecommunications. If the infrastructure is missing, considerable additional costs may arise.
Providing the infrastructure is the municipality’s responsibility. However, it may pass the costs on to owners through infrastructure contribution charges under Sections 127 et seq. BauGB; the municipality itself must bear at least 10 percent of the costs. For buyers, this means: Check whether the infrastructure contribution charges have already been paid or are still outstanding. A seemingly inexpensive plot without infrastructure may be more expensive after deducting the infrastructure costs than a fully serviced building plot.
Shape, size and soil conditions
Two plots of equal size with equal building potential may have different values – because of theirphysical characteristics:
- Shape: A rectangular plot of sufficient width is easier to develop than a narrow or sharply tapered plot.
- Size: Very small plots restrict development; very large plots may be divisible under certain circumstances, which can increase their value.
- Building ground: Rock, a high groundwater table or a sloping site make foundations more expensive. A soil survey provides clarity.
- Contaminated sites and trees: Contaminants in the soil or protected trees may restrict or increase the cost of development.
- Orientation and surroundings: Sun exposure, views and tranquillity have a noticeable impact on the price.
The standard land value as a starting point
The most important reference point for the land value is the standard land value. Pursuant to Section 196 of the Federal Building Code, this is an average location value for land that the expert committees of cities and districts derive from actual purchase prices. The values are published, and “anyone may request information on the standard land values from the office”. They are updated at least at the end of every second calendar year, and annually in many places.
You can retrieve the standard land values free of charge via the federal states’ standard land value information systems (BORIS). Important: The standard land value refers to a hypothetical plot with certain characteristics – such as a typical plot depth and a specific floor area ratio. If your plot differs from this, you must adjust the value upwards or downwards: A plot with a higher permissible FAR is worth more than the standard value alone, while a very deep or poorly shaped plot is worth less.
For orientation: According to the Federal Statistical Office, building-ready land cost around 218 euros per square metre on average nationwide in 2023 – declining slightly for the first time in years. However, the regional range is enormous: In Bavaria, the average was around 381 euros in 2024, while some rural districts remain below 70 euros per square metre.
Development status: from meadow to building plot
How close a plot is to being developable is described by the so-called development status. The Property Valuation Ordinance (Section 3 ImmoWertV) distinguishes four stages – with a major impact on the price:
- Agricultural or forestry land: land usable for agricultural or forestry purposes without Anticipated building land. Affordable, but not buildable.
- Anticipated building land: Plots that can be expected “with sufficient certainty” to be developed in the future. Speculative, as it is unclear whether and when building rights will actually arise.
- Raw building land: Plots that are intended for development but have not yet been serviced or have an unfavorable layout.
- Building-ready land: Plots that can be built on immediately in accordance with public-law regulations and the actual circumstances. The highest value.
The higher up in this list, the greater the risk – and the lower the price. Anyone buying anticipated building land is speculating that it will become building-ready land; this is never guaranteed.
Advantages and disadvantages: valuation report or your own assessment?
Whether you estimate the value yourself or commission a valuation report depends on your objective:
- Advantage of your own assessment: The standard land value, comparable listings and the key figures from the development plan are freely accessible and sufficient for an initial orientation.
- Advantage of a valuation report: A market value appraisal by a publicly appointed expert is well-founded and recognized by courts, the tax office or in inheritance cases.
- Disadvantage of your own assessment: Special features such as layout, building ground or subdivision potential are easily misjudged by laypeople.
- Disadvantage of a valuation report: Depending on the value, a full valuation report can quickly cost several thousand euros; a short report is less expensive but less conclusive.
For a private sale, the combination of the standard land value and current comparable listings is often sufficient. In disputes, inheritances or for unusual plots, obtaining a valuation report is worthwhile.
FAQ on land valuation
How do I find the standard land value for my plot?
Via your federal state’s free standard land value information system (BORIS). Alternatively, the local expert committee of the city or district provides information – it is legally obliged to do so under § 196 BauGB.
What is the difference between the standard land value and the market value?
The standard land value is an average location value per square meter for a typical plot in the zone. The market value is the specific value of your plot, taking its individual characteristics into account. The standard land value is the starting point, not the final result.
How strongly does buildability influence the price?
Very strongly. A plot on which two full stories are permitted, is worth significantly more than one with only one, assuming all other location factors are the same. GRZ and GFZ also help determine how much saleable floor area is created – and therefore the price.
How much does a land valuation cost?
A short-form valuation often falls in the low four-figure range, while a full market value appraisal can cost several thousand euros depending on the land value. It is usually not necessary for a simple indication of the likely sale price.
Is land with future building potential a good investment?
It can be worthwhile, but it is speculative. Whether and when land with future building potential becomes building-ready land depends on the municipality’s land-use planning and is not guaranteed. The low price reflects precisely this risk.
Conclusion: How to approach the value
The value of undeveloped land is determined by its buildability. First clarify through the local development plan or § 34 BauGB what and how much may be built there, and check the GRZ and GFZ. Then examine infrastructure provision, layout and ground conditions. The standard land value serves as a pricing benchmark, which you adjust to the specific characteristics of your plot. Anyone who carefully works through these steps will quickly recognize whether an offer is fair – and can compare plots on TraumImmo selectively.