To determine building value, you would divide the building (improvement) income by which rate?

To determine the value of a building based on its income, the appropriate approach is to utilize the building (improvement) capitalization rate. This rate represents the return on investment that an investor expects to receive from the property. By dividing the income generated by the property (usually net operating income) by this capitalization rate, you can calculate the value of the building.

The capitalization rate serves as a critical metric in real estate valuation as it reflects market conditions, risk factors associated with the investment, and the potential for income generation. It essentially converts future income streams into a present value, allowing appraisers and investors to assess the worth of the property based on its income-producing potential.

In this context, improvement assessment rates and overall effective tax rates do not directly pertain to determining the value based on income. While the market capitalization rate could be relevant in some analyses, the specific focus on building income directly relates to the building (improvement) capitalization rate, making it the most accurate choice in this scenario.