Which principle suggests that the value of a property increases with its productivity?

The principle that suggests the value of a property increases with its productivity is known as surplus productivity. This principle focuses on the concept that the value of a property is derived not just from its physical attributes but also from how productively it can be utilized to generate income or other benefits. When a property can produce a surplus—meaning the income generated exceeds the costs associated with it—its overall value rises. This concept is particularly relevant in agricultural properties, commercial developments, or any real estate that yields significant income.

Surplus productivity is a key consideration for assessors and investors, as it underscores the importance of evaluating the potential earnings of the property. Properties that can be enhanced through better management or improved practices often see a corresponding increase in value due to the anticipated productivity gains.