What principle of appraisal states that net income remaining after costs is credited to the land?

The principle that states that net income remaining after costs is credited to the land is known as Surplus Productivity. This concept plays a crucial role in real estate appraisal by emphasizing the relationship between land and the income it can generate. Essentially, Surplus Productivity indicates that after accounting for all operating expenses and costs associated with property improvements, any residual income is attributed to the land itself.

This principle is significant because it establishes the value of land based on its ability to produce income, creating a direct connection between the land's productivity and its market value. In this context, understanding how to assess the income-generating potential of a property helps in arriving at a more accurate appraisal. This principle is foundational in various valuation methods, particularly in income-producing properties.

Other principles like Market Value or Income Approach refer generally to valuation methods without explicitly addressing the specific relationship of surplus income attributable to the land. The Cost Approach, meanwhile, focuses on estimating the value of a property based on the costs of construction and land acquisition, which is distinct from the concept of Surplus Productivity.