Legal Definitions - clear annual value

Clear annual value refers to the net yearly income that can be earned from a piece of property after all expenses, such as taxes and mortgage interest, have been paid. For example, if a rental property generates $50,000 in rent each year, but $10,000 is paid in taxes and $5,000 in mortgage interest, the clear annual value would be $35,000.

This value is important for property owners and investors as it helps them determine the profitability of a property. It can also be used by insurance companies to calculate the amount of coverage needed for a property.

For instance, if a property has a clear annual value of $35,000, an insurance policy may be written to cover that amount in case of damage or loss.