What is it?
Highest and best use is an appraiser’s question: “what use of this land or building gives the highest value?” It must be a use that is reasonably probable to actually happen.
A BC Assessment policy that quotes the Appraisal Institute of Canada’s standards describes four tests: physically possible, legally permissible, financially feasible and maximally productive.
The four questions
- Physically possible: do the shape, size, services and environment of the site support the use?
- Legally permissible: do zoning and the Official Plan allow it?
- Financially feasible: after weighing price, costs and income, is something left over?
- Maximally productive: of the options, which raises the value of the land the most?
Where is it used?
It matters when you ask whether an empty office could be changed to another use, or what a site with an old building is worth if it is cleared and rebuilt. For development land, the chance of getting approvals is usually weighed too.
What the law and official sources say
Quotes are copied word for word. The "In plain words" lines are our explanation, not an official translation.
Highest and best use is, “the reasonably probable use of Real Property, that is: physically possible, legally permissible, financially feasible, and maximally productive, and that results in the highest value” (Canadian Uniform Standards of Professional Appraisal Practice, Appraisal Institute of Canada, 2026).In plain wordsThe reasonably probable use that is physically possible, legally permissible, financially feasible and maximally productive, giving the highest value. This is a policy of a British Columbia agency, and the definition quotes the Appraisal Institute of Canada’s standards.
Source: info.bcassessment.ca/services-and-products/APPs/Highest-and-Best-Use-Policy.pdf · checked Nov 2, 2026
Common questions
Is the current use always the highest and best use?
No. If the current use is worth less than the site could be, another use may be the highest and best. But that use must be legally allowed and realistic.
Who decides it?
Usually a qualified appraiser, looking at market data, zoning and costs. This page is an explanation to help you understand and does not replace an appraisal.
Guides that use this term
Sources checked
- BC Assessment, Highest and Best Use Policy · checked Nov 2, 2026