3 Recent publications on Mass Valuation Models and Municipal Cadastral Taxation

We are very pleased to disseminate recent publications related to the value function of the Territorial Administration System. In short, they are valuable documents that come to provide fresh experiences and proposals at a stage when the methodological rescue of traditional schemes, the use of technologies and the sustainability approach are committed to solving the problems of what Latin America is experiencing in relation to the cadastre. fiscal; especially in relation to its practicality, cost reduction and regular updating.

These three publications are:

1. Real Estate Market and Property Tax.

Applications of mass valuation techniques.

This document focuses on the challenge for subnational governments in Latin America and the Caribbean to improve their tax revenues through measures that are easy to implement, have low costs and generate resources in the short term.

It is about answering questions like:

What technical alternatives exist for subnational governments to increase their own income in an agile and practical way?

What can be done to better leverage subnational tax potential, and particularly real estate tax potential, without having to modify tax policies, make large investments in information systems, or carry out costly modernization projects? cadastral?

How can new information technologies be used to overcome the technical deficiencies of tax administrations and subnational cadastres?

Of course, although these are common sense questions in different areas of taxation, the document is focused on the real estate tax, since its benefits are widely known because it does not generate distortions in the economy, it is progressive in Its application is based on the principle of benefit, since the value of the properties reflects the local provision of services and infrastructure; and contributes to governance, accountability and tax equity.

Specifically, the purpose of this research was to estimate the tax potential of the real estate tax if market values ​​are used as a reference for the cadastral valuation. To achieve this, various valuation techniques were applied, cadastral values ​​were adjusted and the tax potential was estimated in six cities in Latin America. In turn, this study allowed us to establish that there are multiple strategies to carry out mass valuation, which can be adapted to the different institutional capacities of subnational governments.

As a result, the investigation revealed:

• The great versatility of mass valuation techniques,
• the growing advantages of having open georeferenced data and/or online information,
• The importance of real estate market observatories as an instrument to monitor the market and capture information on purchase-sale transactions and,
• The possibility of achieving greater integration between the cadastre and subnational tax administration systems, based on the use of market values ​​of real estate.

The document is enriched with new and well-worked visual aids. From both a conceptual and methodological perspective, the document seeks to demonstrate that, to approach the tax potential of the real estate tax, it is not necessary to carry out major reforms (which does not exclude that these are not necessary) nor to carry out costly investments in the collection of cadastral data. It states that the use of mass valuation techniques solves, to a large extent, the problem of updating cadastral values ​​while laying the foundations so that, always taking into account the restrictions of the local context, the values ​​are adjusted to the determination of tax bases.

Finally, this publication shows that, even maintaining the current tax policy, the real estate tax can increase enormously if the tax base is adjusted, thus allowing local finances to be improved and greater tax justice to be achieved.

In short, a great document that does not come from a smoke on the fourth floor of a building. What's more, it directly involved 12 researchers specialized in the subject, in addition to having the support
from the authorities and technicians of six municipalities in Argentina, Brazil, Colombia and Mexico and from several reviewers and commentators.

2. Cadastre, real estate valuation and municipal taxation.

Experiences to improve your articulation and effectiveness

This document presents new schemes that leverage big data and cloud processing to create maps of land and property values ​​to enable new, more equitable and efficient tax schemes.

After good conversations with Diego Erba, one of the participants in this document, it did not surprise me that this proposal challenges the methodological aspects of the cadastral modernization that has been experienced in Latin America in the first two decades of the 21st century. We are aware that, for the most part, the objectives of these projects prioritized the tenure function of the administration of the territory, seeking to integrate the cadastre and property registration systems, without paying sufficient attention to the value function involved in fiscal management and taxation.

And although we know that the tenure approach, to make land markets more efficient and reduce social inequities in relation to regularization, the fiscal issue must be addressed. We are also aware that the valuation methods disseminated in a large part of Latin America have serious difficulties in updating them, which is why this document proposes the alternative of changing the cadastral model, linking it with the tax administration through new valuation methods and the establishment of observatories for the continuous and systematic collection of real estate market data.

It is proposed that the implementation of automated mass valuation models makes it possible to predict values ​​based on algorithms and mathematical models. Also promoted, with use cases, the use of tools such as artificial intelligence, geographic information systems, open access data, image processing in the cloud, as well as big data, allows progress with efficiency and quality towards the development of new value maps.

In conclusion, a valuable document that challenges us to reconsider updating real estate valuations and modeling the functioning of the land market, enabling the structuring of more equitable and intelligent tax schemes that promote more and better public policies.

3. Multipurpose territorial cadastre applied to municipal management.

This is a manual published by the Brazilian Ministry of Cities, only available in Portuguese.

This document has attractive illustrations and a pedagogical vision to understand how the use of cadastral information can facilitate the provision of services to citizens and decision making based on knowledge of the territory.