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Simple English definitions for legal terms
unearned increment
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A quick definition of unearned increment:
Unearned Increment: This term refers to an increase in value of something that a person did not work for or earn. For example, if someone buys a piece of land and the value of the land goes up over time, that increase in value is considered an unearned increment because the person did not do anything to make the land more valuable.
A more thorough explanation:
Definition: Unearned increment refers to an increase in the value of property or assets that is not a result of any effort or work by the owner. It is an increase in value that occurs due to external factors such as changes in the economy, population growth, or government policies.
Examples:
- When a property owner experiences an increase in the value of their property due to the development of new infrastructure, such as a new highway or public transportation system, this is an example of unearned increment.
- Another example is when a property owner experiences an increase in the value of their property due to a change in zoning laws that allow for more profitable use of the land.
These examples illustrate how unearned increment can occur due to external factors that are beyond the control of the property owner. In both cases, the property owner did not do anything to directly increase the value of their property, but rather benefited from changes in the surrounding environment.