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05-08: New Tools for Applied Land Valuation
Simplified Property Tax Appraisal For Effective Revenue Mobilisation
1Ulster University, United Kingdom; 2International Association of Assessing Officers; 3University of Pretoria
Value based property taxes are widely used throughout the developed world. For many transitional and developing countries the use of property taxes is often difficult due to the level of immaturity in the property market, under-declaration of transaction prices and excessive transfer taxes. This hampers effective revenue mobilisation and acts against efforts to support fiscal decentralisation. This paper plans to investigate the use of simplified approaches by utilising more readily available data such as floor area/size and location. The hedonic modelling literature suggests that both of these variables contribute significantly to explaining the variation in selling prices of real estate. Also considered will be simplified approaches which contribute towards simplifying billing, collection and enforcement, including banded approaches. The objective is to test these approaches against a value based system and to measure the comparative performance against standard metrics, including the IAAO ratio standards of COD, PRD and PRB.
Achieving Fair Property Tax Valuations with Geospatial Modeling & International Valuation Standards: A Case Study of the Moldova Real Estate Market
1International Association of Assessing Officers, United States of America; 2World Bank, Washington, D.C.; 3Agency of Real Estate and Cadastre, Republic of Moldova; 4Ulster University, Northern Ireland
Inaccurate real estate valuations used for ad valorem or value-based property tax calculations potentially lead to a variety of costs, both financial and other, for tax payers and governments alike. More accurate, research-backed valuations help governments promote fairness, accuracy and defensibility in their assessments, resulting in higher property tax acceptance and participation and reduce administrative costs associated with appeals. This research will present the latest methodological techniques in use for value-based property taxation in mature markets like the United States, and it will be the first of its kind to test the applicability and usability of these models and techniques outside the United States: in the Republic of Moldova, a former Soviet Republic that gained independence in 1992. This research will aid in guidance and valuation policy prescriptions for transition economies with similar markets and/or similar data availability to Chisinau.
Korea's Mass Assessment System of Land Pricing for Taxation, Using ICT
Korea Appraisal Board, Korea, Republic of (South Korea)
Land policies of South Korea played a key role in supporting economic development during its industrialization period. Through its land policies, urban land was properly supplied for the construction of public infrastructure, houses and plants, while urban problems such as land price hikes, speculation, and urban sprawls have been mitigated. The establishment of the Public Announcement System of Land Price (PASLP) is one such example. The system was introduced in 1989 to provide a unified land price standard for various administrative tasks, including taxation and compensation. Since its introduction, the PASLP has benefited from constant improvements through the development of Information and Communications Technology (ICT). Utilization of ICT has brought major innovations in land assessment, by reducing subjective judgments of assessors while enhancing the accuracy of site surveys.
Can The Principle Of Cost-Minimization Take Priority Over Securing The Reliability Of Tax Policy?
Jeju National University, Korea, Korea, Republic of (South Korea)
Big Data automation techniques is problematic in the property tax system. Due to the impossibility of perfect modeling and the difficulty of reflecting constantly-changing real estate market factors in models, linear assumptions should be carefully considered before modeling regression analyses. In the interests of cost minimization, Korean government decided not to use appraisers and the Three Methods of Appraisal in its residential property tax system. In Korea, data and technology have replaced appraisal experts. Have the results been positive or negative? The study examines the dangers and anticipated outcomes of focusing on administrative cost-minimization in the property tax system. Inaccurate data results in poor policy choices that ultimately distort the fairness of taxation. It also discusses the Jeju Provincial Government’s awareness of this problem and alternative solutions for dealing with it.
The use of standard price points in mass appraisal of housing land. A case study
National Land Survey, Finland
Modern geostatistics offers sophisticated analytical tools. However, in most property taxation systems they are not used at all so far. This paper presents an exercise how to use geostatistics to produce up-to-date estimates of land values.
This presentation is about producing standard land value maps in an automated way. The idea is to proceed from price datasets to standard land value maps stepwise. The critical steps are land price models, estimating land prices based on single and multifamily building prices or values, and finally producing the land value maps manually or automatically.
The exercise is based on revaluation of land in Finland due to be finished by the end of 2019. Higher rates are applied to land than structures. Thus land values have to be calculated everywhere, also in locations without vacant land, and no land sales.