The theory of Highest and Best Use is fundamental in the valuation of real estate.  Since golf courses consist of large tracts of land, assessors should always consider the highest and best use and development potential of the property.  A property with a higher value under an alternate permitted use should not be valued as a golf course.  The minimum value of a golf course is represented by its unimproved land value.

The Appraisal Institute of Canada describes the concept of highest and best use as:

"That use which is most likely to produce the greatest net return over a period of time.  Net return may be monetary as with income producing properties or may, in the case of a single family dwelling, take the form of amenities such as pride of ownership, comfort or convenience."

The highest and best use should be determined as if vacant and improved.  The four highest and best use tests are: physically permissible, financially feasible, legally permissible and maximally productive.

The valuation procedures contained in this module are based upon the assumption that the highest and best use of the property is as a golf course.

See the Addenda for information on the Petro Canada vs. Assessor of Area 12 - Coquitlam decision - When valuing a property at its Highest and Best Use must be considered.  When rezoning is likely to occur in the immediate future, the value attainable under that use can be used for assessment purposes.