ABSTRACT
It is customary in valuation to ignore the effects of income tax, on the grounds that investors compare investments on the basis of their gross rates of return. This may well be an acceptable criterion where tax affects all investments and all investors in a like manner. Although this is not the case in the property market only a few valuers would argue that tax should always be deducted from income before being capitalised at a net-of-tax capitalisation rate a ‘true net approach’.
