First of all, it is necessary to define the concept of “mass valuation of land plots”. In this work, it was defined as follows: mass valuation of land in populated areas involves a systematic assessment of groups of land plots on a certain date using modern methods, principles and techniques of assessment. The use of mass valuation makes it possible to evaluate not individual land plots, but groups of land plots that are similar in basic functional and typical characteristics.

Mass land valuation provides an idea of ​​the value of similar land plots, but it also provides information about the value of a single plot of land.

Both mass valuation of land plots and valuation of individual property objects (land plots) are systematic methods for calculating value. They differ only in scale. Mass valuation models include more conditions (more valuation factors) because they attempt to replicate the market for one or more land use options over a large geographic area. On the contrary, the valuation model for single property objects (real estate) reflects the market for one land use option in a limited area.

The assessment quality criteria are different. When evaluating single properties, its quality is determined by the small number of comparable properties that have been sold.

The quality of mass valuation of land plots is measured by statistical methods developed on the basis of a sample of data on the sale and rental of land plots throughout the territory assessed by the mass valuation model.

In the process of conducting a mass assessment of land plots, it is necessary to take into account several unified assessment principles. In this work we have defined the following principles:

♦ the principle of supply and demand;

♦ principle of change;

♦ the principle of free competition;

♦ principle of substitution;

♦ the principle of the contribution of a separate factor (element);

♦ the principle of the best and most efficient use of land;

♦ the principle of forecasting (more often called the principle of expectation).

The principle of supply and demand. Land plots have value because they have a certain utility for a specific user and at the same time are scarce. The demand for land plots is created by objective conditions of utility - the ability to meet the requirements and accessibility, but is significantly limited by the possibilities of acquiring them by individuals and legal entities. The law of supply and demand dictates the price of land plots: the more supply there is on the land market, the lower the price of land plots, so there is an equilibrium point where supply and demand are in balance. Here, the market value reflects production costs and is equal to the cost plus the average rate of profit of construction (taken into account that any improvements are made by builders). The price of land plots begins to fall as supply increases (market overstocking) or demand decreases (the market requires land plots with utilities). Also, the price of land plots begins to rise when there is little supply on the market (land plots do not meet the requirements of a potential client) or the demand for certain plots is high.

The formation of supply and demand is determined by several factors unique to the land market. Thus, the demand for land plots for industrial production is determined by the following factors:

♦ availability of operating engineering equipment and landscaping;

♦ state of engineering and geological conditions of construction;

♦ transport accessibility of the settlement.
It must be taken into account that the land market is at the stage

formation, so the principle of supply and demand does not always dictate the price at which a transaction can occur. In this case, the following factors may play a role:

♦ ability to bargain;

♦ financial capabilities of bidders;

♦ methods of payment for the transaction;

♦ political situation in the country and regions.

In a country with a stable economy and low inflation, supply and demand are fairly predictable factors, but at the same time, the law of supply and demand may not always work throughout the year or in a particular region and lead to inflated prices for land plots. Such distortions are typical for monopoly control of the land market by various structures (local administration), in particular, this can be expressed in exorbitantly high fees for land use (land tax and rent).

Conclusion. Supply is the number of land plots available on the land market for sale at a fixed price. Demand is the number of land plots that potential buyers want to purchase at a specific price they are interested in.

The interaction of supply and demand determines market prices for specific land plots.

The principle of change. Land, environment, natural and social environments are subject to change. Land plots undergo various changes during their exploitation. These can be processes of both improvement - carrying out communications, land reclamation, application of fertilizers - and deterioration - waterlogging, pollution with pesticides. However, changes may also be associated with a change in the type of human activity and, as a consequence, with a change in the intended purpose of a particular land use. Economic conditions, changing, create preconditions for the opening of some enterprises and the closure of others. The emergence of new technologies and the shortage of residential development generate demand for land plots for this purpose. The combination of these factors and political stability in the region changes the value of land plots: it increases the value of some and decreases the value of others.

The process of assessing land plots and other real estate objects has a cyclical four-phase development period: growth, stability, decline, renewal.

Growth is a period of increasing incomes of the population and modernization of real estate (land).

Stability is a period of equilibrium without visible changes in the level of income (or losses) of the population and the use of previously created real estate.

Decline is a period of decreased demand for previously created real estate.

Renewal is a period of revival of market demand for real estate and its modernization.

This cycle of changes is periodic and repeats itself. However, its distinguishing feature is its vagueness, and its changes are very difficult to perceive by a non-specialist.

Therefore, the expert must be able to determine the onset of each period of development and predict the further development of the situation, which is very important when assessing land plots. The expert must sense and monitor changes in the land market in the region being assessed.

Conclusion. The expert must be able to monitor the situation on the land market over time, i.e., predict the future state of the market.

The principle of free competition. Profit is defined as the portion of income generated by the use of real estate over and above the costs of labor, capital, management, and land (i.e., factors of production).

Profit is the equivalent of cash received for business activities. Excess profit, or monopoly profit, is excess income that exceeds the necessary compensation for entrepreneurship. The purpose of normal profit is to create free competition in the market for its rational functioning, and super-competition will destroy profit.

If a situation is created in the region where entrepreneurs extract excess profits, the process of penetration of other entrepreneurs into this market begins, which leads to excessive competition, as well as to an increase in supply on the local land market. In this situation, demand may remain stable, but net income will fall.

Conclusion. The greater the competition among sellers in the local land market, the lower the profit; as a result, small entrepreneurs go bankrupt, which allows the creation of a monopoly by the most competitive entrepreneur.

The principle of substitution. This principle is based on the fact that the maximum cost of a land plot is determined by the lowest price at which a similar plot with a similar set of characteristics can be purchased. This principle underlies each of the three traditional methods of real estate valuation.

In particular, in the income method, this principle will mean that the land plot will generate the same income throughout the entire period of its operation, and if it is capitalized at the moment, it will be equal to the asking price for a similar land plot.

In the cost method, this principle means that a potential buyer will not pay more for a plot of land than he can spend, taking into account the time it takes to bring a similar plot of land to the parameters that he needs.

In the comparative sales method, this principle will mean that a potential buyer on the free and alternative land markets will not pay more than the lowest price asked for a similar plot of land with similar characteristics.

Conclusion. The principle allows a potential buyer to choose the optimal purchase at a reasonable price.

The principle of the contribution of a separate factor (element). This principle means the magnitude of the influence of any individual factor (element) on the total cost of the land plot. In this case, the contribution is understood as the total addition to the value of the land plot, to the final price, provided by a given factor (element), and not the actual average cost of creating a given factor (element). In particular, factor-by-factor economic valuation of land uses factors that influence both positively and negatively the final value of the land plot.

Conclusion. This principle allows us to identify trends and patterns in the price of land plots when assessing them factor by factor.

The principle of the best and most efficient use of land is based on the fact that the land plot should be used as efficiently as possible, taking into account its physical capabilities, in a legally legal, financially feasible way, which should lead to an increase in the market value of this land plot.

This principle must meet certain criteria and factors

Forecasting principle(more often called the expectation principle).

Forecasting is the determination of the current value of income or benefits that can be obtained in the future from the ownership, disposal or use of a property (land). The economic theory of real estate valuation suggests that the utility of a property depends on the value of projected future earnings. In particular, for land real estate it is assumed what net income a potential investor (buyer) will expect from the use of this land plot and its subsequent sale. The most important are the amount of projected or possible net income, the duration of its receipt and the possibility of resale of the land plot (or projected resale value). Based on the postulates of the theory of value “money tomorrow is cheaper than money today” or “every ruble received in the future has a lower value than the current ruble,” it is necessary to adjust the predicted future receipts for changes in their value over time.

4. Methods for mass valuation of land in cities (settlements)

To assess the lands of settlements, urban and settlement types, it is necessary to conduct a mass assessment of lands for certain types of land users. Mass assessment of land in populated areas involves a systematic assessment of groups of land plots on a certain date using promising techniques and statistical analysis of calculation results. The use of mass valuation makes it possible to evaluate not individual land plots, but a group of land plots that are similar in basic functional and typical characteristics. For these purposes, it is necessary to divide all urban land users into groups.

The main defining features of grouping land users into assessment groups are the following:

1) the social significance of these objects in the infrastructure of the locality;

2) features of construction and placement on the territory of a populated area;

3) features of the availability and operation of the engineering and construction infrastructure of the settlement;

4) production and technical characteristics of the facility on a specific land use;

5) the relationship of urban land users with each other regarding the main factors of production and production needs (communications, transport, social infrastructure, conditions for the location of production, safety requirements and operation of these facilities);

6) features of the economic turnover of land;

7) features of the economic use of land plots.

Analysis of these characteristics allows us to draw a conclusion about the heterogeneity of the methodological approaches used to assess various groups of land users in settlements. Conventionally, they can be grouped into the following segments.

♦ Segment I - a group of land users, including large industrial enterprises (occupying an area of ​​1.5 hectares): lands occupied by defense and aerospace facilities, utility and storage facilities, communications and space support facilities, transport routes (services for their maintenance), urban forests (as a reserve area for development), agricultural lands (as a reserve area for development), municipal and household purposes (dry cleaning, laundries, boiler houses, medical and treatment institutions, large public catering facilities).

♦ II segment - groups of commercial facilities (area up to 12 hectares): warehouses, catering and retail establishments (small cafes, restaurants, tents and pavilions);

♦ III segment - a group of land users, including objects with a unique condition of land use: urban forests and forest parks (biological and recreational value), agricultural lands (and the assessment of arable land, irrigated arable land and double-regulated arable land is carried out separately).

An analysis of the listed groups of land users shows that for each of these groups and their individual components (individual objects of assessment) their own methodology for the economic assessment of land in populated areas will be used.

In particular, when assessing the lands of any or each of the listed groups of land users, you can use a transformed costly method of mass assessment of land plots.

When assessing the lands of group II land users, it is necessary to apply, for a more accurate assessment of land, all three assessment methods and the method of isolating the value of land from the market value of the property (multi-storey buildings, office buildings and other commercial enterprises). To solve this problem, it is necessary to have data on the market value of buildings and structures on the assessed lands; data can be obtained by two methods: profitable and comparative sales of similar objects on the real estate market.

The replacement cost of these objects, taking into account moral and physical depreciation, is determined according to the BTI data of settlements or using a special urban planning methodology based on cadastre data.

The assessment of the III group of land users, a group of land users with unique conditions for land use, assumes a combined approach to the assessment of such land users, since these lands will be not just a spatial basis, but also an instrument of production. This requires a special approach, a certain expression in economic assessment.

It should be noted that when assessing forests, an assessment will be made of areas occupied not only by urban forests, but also by forest parks, parks, alleys, protective forest belts and other plantings inextricably linked with the areas being assessed.

To more fully identify price zones, we initially tie the assessment of such lands to architectural and urban planning zoning, and then, as similar price areas and blocks arise, we carry out price zoning.

General principles for selecting an assessment object. The object of assessment that interests us - a populated area - is defined as a set of territorial and production bases for people's residence.

The object being assessed must meet a set of specific assessment principles that can significantly facilitate the expert’s task in the process of economic assessment of land in populated areas.

In particular, the author defines the following principles: the formed city limits, the principle of formation of the habitat and human activity, the principle of autonomy (district center), the principle of territory functionality.

Let's look at these principles in more detail.

The principle of the formed city limits. Any settlement - the object of assessment - must have a clearly defined urban area, in which all the modern attributes of a settlement are present.

This principle allows, in the process of conducting a mass assessment of the lands of a populated area, to obtain more accurate information about all the patterns of formation of a populated area. In this case, the city line refers to any border of a populated area (village, village, town, city).

The principle of the formed environment and human life. This principle means that the assessed object must meet the following requirements:

1) more than 70% of the city’s population has lived in this locality for over 10 years;

2) the settlement has a clear division into residential and industrial areas (neighborhoods);

3) the populated area must have an established structure for serving the population (the presence of a network of shops, consumer service points for the population, the availability of cargo and passenger transport, the presence of a network of streets and highways);

4) the presence of an administrative and management block and economic and production units for servicing the settlement.

The principle of autonomy. This principle is based on the fact that a settlement has sufficient autonomy as an object capable of satisfying the requirements of the settlement living within the boundaries of the settlement.

The principle of territory functionality. This principle is based on the fact that any settlement is intended to accommodate people and employ the labor of these people, which allows for a more rational placement of the region’s labor resources. In particular, the territory of a populated area should have the entire range of industries common in the given region.

All these principles are unified and practically applicable to any settlements on the territory of the Russian Federation.

In economic terms, land valuation may involve assessing property rights to it. This could be, for example, property or rental.

Selection method

Evaluates land plots on which there are buildings and if there is information about the amounts of transactions with similar plots. This assessment method is performed in a specific sequence:

1. The comparative elements of objects are determined;
2. The differences between each of the similar objects and the one being assessed are identified;
3. An adjustment is calculated for each element;
4. The market value of the entire object is derived based on adjusted data for similar transactions;
5. The cost of improvements is calculated;
6. The cost of the memory is determined.

It is also used when there is no standard activity on the market.

Remainder method

Evaluates areas that can be improved by development and get the maximum profit from it.

The method is carried out according to this plan:

1. The income from the object is determined based on the amount of market rent and planned expenses;
2. The income from buildings is determined;
3. Income from land plots is capitalized into the price according to the norms.

Subdivision method

Used when dividing land into small plots. It is carried out in the following sequence:

1. The number and size of future plots are determined;
2. The price of acquired memory is determined by comparison;
3. Costs are calculated, a development schedule is drawn up, the approximate time of sale is determined, and profits are calculated;
4. Net profit is calculated after the sale of all plots;
5. A discount rate is selected that will reflect the risks during development and sales.

In order to develop land, the following costs are usually taken into account:

• Clearing the territory, planning and dividing into sections;
• Construction of utility networks, roads;
• Salaries for designers and workers, insurance, taxes;
• Advertising and marketing.

Only appraisal companies (legal entities and individuals - individual entrepreneurs) can engage in appraisal activities. The whole procedure is divided into several stages.

• An agreement is concluded To compile it, the appraiser must have the following information:
  • Purpose of the assessment;
  • Evaluation Standards;
  • Land category;
  • Type of permitted use;
  • Type of property;
  • The presence of restrictions on the disposal of the object by the owner;
  • Land registry data;
  • Availability of buildings;
  • The date for the assessment is agreed upon.
• The collection and analysis of available information is carried out. This includes:
  • Legal documents and property registration data;
  • Physical characteristics of the memory;
  • Description of buildings and utilities;
  • Description of the location of the storage facility and adjacent facilities;
  • Features of the storage unit related to its location;
  • Economic factors are analyzed.
• A direct inspection of the facility and surrounding area is carried out.
• The necessary information and documentation is requested from the owner of the site and operational services.
• An analysis of the real estate market and the practice of such sales is carried out.
• Determination of the assessment method.
• Coordination of the obtained results.
• Compilation of a report.

Final report

The results are presented in the form of a written report and serve as an evidentiary document for interested parties. The form and content of the report must comply with the requirements of federal law. In practice, a unified report form has not yet been developed, so different appraisal companies can provide reports on the work performed in different forms and different in content. But the information they contain, the form of research and the final conclusions must meet certain requirements:

Availability of information about the cost of the object. Availability of information from which the customer was able to independently:

• Understand its content and method of assessment;
• Check the intermediate and final results of the assessment.
  • The information in the report must be confirmed and justified;
  • The content must comply with the principle of unambiguity and not cause ambiguity in understanding what is written. Specific terms must be defined;
  • Compliance with the principle of verifiability (regarding all calculations given);
  • Interim optional information should not be contained in the report.

When preparing an assessment report, the contractor must:

• Complete and submit the assessment report to the customer in a timely manner;
• Indicate in the report the date of the assessment, assessment standards, purpose of the assessment and other data that does not allow for double interpretation of the assessment results;
• When establishing any value (other than market value) during the assessment process, its criteria are indicated, as well as the reasons for which such an assessment was carried out;
• The report may contain information that, in the opinion of the contractor, is necessary to be included in the report for a more complete application of a particular method;
• Number and page the report, sign it with your own hand and certify it with a seal.

Cost

The cost of performing appraisal work depends on the area of ​​the storage facility, its location and the tasks assigned to the contractor.

In different regions of Russia, the cost may differ, but on average, the cost estimate can be minimal from 2 thousand rubles and above. The assessment period usually does not exceed 5 working days.

With the development of the real estate market in Russia, landowners have felt the need to understand the value of the correct assessment of existing real estate.

A cost-based approach to valuation cannot be applied to land, since it cannot be reproduced (if we mean only land without buildings). For self-assessment, you can use income or comparative methods. The income method is somewhat more complicated than the comparative method, so appraisers recommend using this method to initially determine the value of land.

The use of a comparative approach is available to almost every market participant; it can be carried out in several stages:

1. The supply market in the area of ​​interest is being studied. Similar plots for sale are selected.
2. For each of the selected plots, the cost per 1 hundred square meters is calculated. The amount received should be reduced by about 5% - this is the estimated discount amount when concluding the transaction.
3. Calculate the average cost per 1 hundred square meters from the results obtained.
4. Having the average cost per 1 sq.m., calculate the cost of your plot.

The main difficulty in this method is the correct selection of similar sentences, and then it’s simple mathematics.

It is worth noting that such an assessment cannot be legally valid for presentation, for example, to a bank when the buyer takes out a mortgage loan. Only an appraisal completed and provided in writing by an appraisal company can be a legal document.

When the need arises for a competent assessment of a storage facility, such indicators as location and ecology are taken into account. The market will show the most likely cost of the plot, since it will simply not be possible to sell it for much more than what is offered in the same real estate sector.

The market value of land depends on the amount of probable profit and the timing of its receipt. It may change over time, so an assessment should be carried out immediately before concluding a transaction. The market value may also change due to changes in the intended purpose.

The valuation of private properties in garden and dacha associations is carried out taking into account the prices of similar objects or undeveloped plots being sold. The cost in these cases strongly depends on the availability and intensity of transport links, on the availability of electricity and gas and, to a large extent, on the environmental condition.

5 / 5 (votes: 2 )

Currently, large cities are experiencing a situation that requires the determination of a market-reasonable level of land value, on which mass land valuations are based. To do this, it is necessary to maintain an economically fair balance of interests of all: owners, users of land plots and the municipality, as well as requirements for the rational use of the city territory. Practical tasks facing the city include both the fiscal function (filling the city budget) and the regulatory function.

Diverse tasks are associated with determining different types of values ​​of land plots according to various tasks (for example, for the purpose of determining urban planning or land cadastral valuation) or making appropriate adjustments to a certain “base” value according to the specifics of a particular task. From the experience of foreign countries it is clear that the basis of the methodology for fiscal calculations is the mass valuation of land. It includes the market value of housing, rental income of commercial development and the cost method for properties with weak liquidity.

At the moment, this problem is being solved in the country through the methodology for calculating the cadastral value of land and settlements, which was prepared by Roszemkadastr based on the methodology adopted at the federal level. But there is one more, in our opinion, significant flaw. Based on data on sales of developed plots of land, the cadastral value of land is calculated using the “extraction” method; in the Valuation Standards, which are mandatory for use by subjects of valuation activities, it is called the “allocation method”.

This method requires knowledge of the area of ​​the land plot or data on the land share coefficient (the ratio of the area of ​​land that falls on 1 sq.m. of the total area of ​​the apartment for sale). The technical instructions of this method state that this indicator must be determined on the basis of a table or according to the schedule of the year of construction of the area - (SNiPs in force at that time), which regulated the density of buildings and the number of storeys of residential buildings.

Today, mass economic assessment of city land objects is carried out using a technique that was previously technically impossible to apply, because it required a large number of calculations and multidimensional classifications. Such techniques are characterized by cluster and correlation-regression analysis, methods of paired comparisons and prioritization, a systematic approach and the formation of databases.

By applying these methods, it is possible to increase the scientific validity of management decisions and qualitatively analyze the work of this approach. For example, calculating the cost of land based on data on apartment sales can be done using two approaches (methods):

1. Calculation based on all sales data to a “standard” apartment for a given segment and only then calculation of the cost of land using the allocation method. The advantage of this method is the simplification of the upcoming calculations (for only one apartment), but the disadvantages include the high probability of error in choosing a reference apartment using paired comparison methods, bringing the apartment to the reference and, therefore, the possibility of large inaccuracy of the results.
2. Determining the cost of land in a certain area for each of the apartments being sold. Here the calculations are more complicated (for the entire data set), but the percentage of accuracy increases.

For example, in a certain residential area there are six buildings of different heights and public facilities.

According to the schedule, the need for territory for travel, sidewalks, parking lots, playgrounds and landscaping is calculated, which falls on 1 resident, taking into account the average number of floors in the block of 7.3: and it is equal to 4.2 + 11.1 = 15.3 m2 / person . It turns out that for a population of 1,370 people in the quarter, 20,961 m2 of territory for housing is needed, and the actual area is 12,055 m2. Moreover, the area allocated for retail facilities is 10 times larger, based on SNiP standards, and gives the city authorities a reason to think about placing such facilities in this quarter.

It is necessary to start calculating the cadastral value of 1 sq.m. land in a residential area. The average price of 1 sq.m. of an apartment put up for sale at the beginning of 2005 was determined by 19 thousand rubles, while the average price of 1 sq.m. apartments in new buildings is equal to the amount of 9333.38 rubles excluding VAT. Therefore, taking into account the average wear and tear of buildings in the quarter at 15%, we allocate the price of 1 sq.m. apartments falling on the ground, it is equal to 9639 rubles. Using the land share coefficient, we calculate the market value of 1 sq.m. living space in the block, it is equal to 24,714 rubles/sq.m.

Foreign experience shows that the cadastral value of land falls from 50 to 70% of the market value; it turns out that it is determined at about 24,714-0.6 = 15,000 rubles. Taking into account the amount of rent for the year from 3 to 7% of the cadastral value of the land, in this case it will be equal to 15,000-5% = 750 rubles / sq.m of land.

This is a very low amount for a retail facility (it is equal to a tenth of the cost of renting premises for retail purposes in a given area), and it can bring a significant replenishment to the city budget, since it is almost ten times more than the base rental value for land use.

When compared with another quarter of the city with one residential four-story building and several non-residential real estate objects, according to the schedule, the required area of ​​land for the purpose of serving residents in the quarter is 15.6 + 5.8 = 21.4 sq.m/person, or 1819 sq.m. . m. According to calculations, the area of ​​land that falls on a residential building is 7,343.1 sq.m. The ratio of retail premises to residential premises also significantly exceeds SNiP standards.

With similar calculations of the rental price for a plot of land, we find out that it is approximately four times less, which characterizes the inefficient use of land in a residential area. These problems can be solved by increasing the share of residential buildings in a given quarter, because now investing money in housing construction is a very profitable business. In this case, the value of the land share coefficient decreases, the cadastral value of the land increases and, consequently, the rent of the used territory in the quarter increases, which, of course, will bring revenue to the budget of the district and the city.

Therefore, massive land valuation acts as the economic basis for managing urban real estate, which contributes to the reasonable use of urban areas and replenishment of the city and district budgets. If you have any questions regarding the mass valuation of land, you can seek advice from the NP “Federation of Forensic Experts”, where you will receive qualified advice on the issues that have arisen, and you can order mass valuation calculations of land.

If you are interested not only in the topic of land valuation, but in related issues, such as real estate valuation, then we are pleased to inform you that we will be happy to conduct a real estate valuation for you, not only in Moscow and the Moscow region, but also in all regions of the Russian Federation.

Prices

NOTE:

The price of land valuation services is indicated including taxes. Transport costs are paid separately.

Land is the most important natural resource, the basis of life. And that is the only reason why it is priceless. For many, the very question of the price of land seems fundamentally unacceptable. Jean-Jacques Rousseau exclaimed: “...you will perish if you forget that the fruits of the earth are for everyone, and that the earth itself is no one’s.” And one of the most prominent thinkers and writers in the United States, Ralph Waldo Emerson, noted: “By purchasing land, you become the property of the land.”

But people have been selling and buying land for a long time. And one of the urgent needs of the existence of the land market is the assessment of the value of land.

Concept of land valuation

Estimating the value of land makes it possible to transfer the conversation about it to the “monetary” plane, to consider it as a commodity. Land valuation is an assessment of a piece of land, since it is land plots (i.e. parts of the earth’s surface, the boundaries of which are described and certified in the prescribed manner), and not land “in general,” that are the subject of civil circulation.

When carrying out valuation activities, several types of land values ​​are used. Article 66 “Land Valuation” of the Land Code of the Russian Federation (LK RF) talks about two types of value: market and cadastral. In relation to land plots they also talk about investment value.

When determining the market value of a land plot, the most probable price at which it can be alienated on the valuation date on the open market under competitive conditions is determined. At the same time, the parties to the transaction act reasonably, having all the necessary information, and the value of the transaction price is not affected by any extraordinary circumstances.

When assessing the market value of a land plot, the intended purpose, permitted use, and rights to it of persons other than the owner are taken into account. With a change in any of these legal parameters, the market value of the land plot changes.

The article outlines the concept of cadastral valuation, provides examples of building mass valuation systems in different countries, and also proves the advantages of innovations in the corresponding segment of Russian legislation.

Reinhold Wessely, Anton Lankin
State cadastral (mass) valuation for tax purposes - Russian and foreign experience
"Economic Strategies", No. 02-2008, pp. 124-131

Introduction and background

The authors of this article have worked together since 1998 as part of the implementation of four projects of the European Union TACIS Program aimed at supporting land reform in Russia. These projects included the following main areas:

• Development of the cadastre system in Russia in terms of legal, institutional and technical framework.
  
• Territorial planning.
  
• Development of a lending system secured by real estate.
  
• Valuation of real estate for tax purposes.
  

During this ten-year period, the cadastre in Russia underwent a transformation from a land cadastre to a comprehensive real estate cadastre as the legal basis for identifying and recording real estate, on the basis of which property rights and other rights are established.

Today, the cadastre is the basis for the implementation of many socially significant functions (see Fig. 1).

Cadastral (mass) valuation for tax purposes has become a key issue of economic development and the future financial basis of municipal budgets. Unfortunately, the provisions regulating the process of state cadastral valuation previously proposed within the framework of the draft Law on the State Real Estate Cadastre were excluded from the adopted version of this law, which leaves a number of issues unresolved.
The concept of mass assessment for tax purposes existing in Russia, even if not fully implemented, from a legislative point of view is an example of a modern system, superior to many similar systems already implemented abroad, with the possible exception of the systems used in some US states.

The concept of cadastral (mass) valuation as the basis for real estate taxation

One of the most important tasks of the European Union TACIS project "Reform of land and property relations II" is to assist the authorities of the Russian Federation, in particular the Federal Agency for Real Estate Cadastre and the Ministry of Economic Development and Trade, in the process of introducing a new system of mass cadastral valuation as a tax base real estate.

Two previous TACIS Projects provided support for the introduction of a mass assessment system in the Russian Federation:

• Within the framework of the European Advisory Service Project "Consultations on Land Policy Issues" ("Development of the system of state cadastral valuation of land in Russia") in 2001, the progress of cadastral valuation of urban and agricultural lands in pilot regions was analyzed.
  
• The project "Support for the implementation of mechanisms for regulating land and property relations", implemented in 2003-2005, made it possible to provide technical support to the cadastral agency in preparation for the implementation of a new system of mass cadastral valuation.
  

General Prerequisites

The Russian Federation is preparing to introduce a new system of taxation of real estate based on the value of the relevant property, close to the market value. The Federal Real Estate Cadastre Agency was tasked with creating a tax base on the basis that the real estate cadastre is the only and most complete list of real estate objects.

In principle, there are two main models that are used in different countries to establish the tax base for property taxation:

• a model based on a predetermined cost (“standard cost”) set by the government;
  
• a model based on market value or value approximating market value.
  

Determining the tax base on the basis of standard value seems to be “simpler” from the point of view of the assessment procedure: in this case there is no room for doubt, since we are talking about an abstract value. At the same time, using a value close to the market value is associated with certain difficulties, namely:

• markets are volatile;
  
• a very careful and more expensive approach to calculating (estimating) market value is required.
  

However, there are very compelling arguments in favor of using market value or approximate market value when taxing real estate.

First, there is the issue of fairness. The "standard" value that is deliberately set by government agencies, even if they use some kind of system, is unfair to the owner of the property, as well as to society as a whole. This system prevents all owners from being treated equally due to the different values ​​of their assets.

Secondly, there is a relationship between the value of real estate and the general economic situation, especially with regard to infrastructure investments, which increase the value of real estate. This relationship can be viewed as a process of distributing economic benefits between the state and citizens, or as encouraging government efforts to improve economic policies and increase investment in infrastructure and, in general, improve the standard of living of citizens.

Evaluation concept

The concept of property rights, as well as related transactions such as sales and purchases, taxation and collateral lending, imply the need to determine the value of real estate. This is quite a difficult process. Over time, rules of thumb and international standards have emerged that are today considered the basic principles and rules of valuation used by professional valuers.

The theory and practice of assessing the value of real estate is based on three approaches that have their own characteristics (see Table 1).

Mass assessment

If there are a large number of properties to be appraised, individual appraisals become difficult and expensive. Therefore, there was a need to develop a concept of mass valuation that would meet the challenges of determining the value of a large number of real estate objects (mainly for tax purposes). As part of this method, a representative sample of real or proposed transactions is analyzed, after which the data obtained is considered typical for all objects of the same class, similar in location, size, quality, etc.

Thus, "mass valuation" can be defined as "a systematic assessment of a group of real estate objects on a given date using standard procedures, using general data based on statistical processing."

The main advantages of mass valuation for tax purposes:

• time (given that results are usually updated annually);
  
• costs – mass assessment is much cheaper than individual assessment;
  
• the possibility of objective and impartial analysis of market influence (statistically and geographically);
  
• the ability to select, search, compare and identify differences between real estate objects using a large amount of information;
  
• integrity of valuation results (fairness in calculating value, since each object is treated equally);
  
• availability of a large amount of data to substantiate and protect the results.
  

The main difficulties associated with the application of this concept are:

• the quality and reliability of input data, especially with respect to actual transaction prices, as well as other important factors;
  
• the presence of a functioning real estate market and a sufficient sample for research;
  
• availability of statistical data processing software necessary to analyze the sample and build an acceptable model.
  

International experience in building mass assessment systems

In individual real estate valuation, three classical valuation methods are used. Mass assessment, the need for which is described above, should also be based on these principles.

Mass valuation is used primarily for tax purposes and also, in some cases, for spatial planning and other similar economic and/or planning purposes. Standards and methods for real estate valuation are accepted in many countries of the world, including Russia.

European countries use a wide range of methods to establish the tax base on which the actual amount of real estate tax is calculated.

Example from Germany

In Germany, real estate taxation is based on the so-called “typical value of the property” (Bodenrichtwert). It is defined as the average cost, depending on location and expressed in euros/m2. This cost is determined annually, published and clearly presented to the public.

An independent commission of experts, consisting of professionals in various fields (surveyors, appraisers, real estate agents, etc.), is responsible for collecting information on transaction prices, establishing the typical value of real estate, creating market reports, valuation in case of forced alienation of property, as well as reports to parliament. Data for collecting information on transaction prices comes from various sources, especially from actual sales contracts that must be declared.

In accordance with administrative legislation, an appeal to the court is possible. However, given the professional competence of the commission members and the specifics of the data collection procedures, appeals are infrequent. Filing an appeal does not delay your taxes.

Examples of real estate taxation based on market value in the United States

In the United States, real estate taxes are used to finance government activities, especially schools, infrastructure, police, parks, and so on. Therefore, the collection of real estate taxes falls under the purview of government agencies and is characterized by a wide variety of methods and rates. In many states, the assessment of real property for tax purposes is organized at the county (district) level and is the responsibility of a "tax assessor" ("assessor"). To determine the tax base, classical mass valuation methods are used. The tax notice preparation and tax collection functions are separate from the tax assessor functions. An excellent example of a modern mass valuation system for real estate tax purposes is the system implemented in the state of Colorado, which, in a sense, can become a model for the cadastral (mass) real estate valuation system being implemented in Russia.

A tax notice (tax invoice) contains a description of the tax base and information about the tax rate. Accordingly, in this case it is possible to file an appeal regarding the contents of the tax bill, which may relate to both the tax base and the amount of tax. In practice, the grounds for appeal are quite limited: this is possible in cases where the property has been incorrectly characterized by type, size or location; There may also be cases of mathematical errors in calculations. Because the methodology used for mass real estate appraisals is established, tested, and open to the public, appeals rarely affect the methodology itself or the results resulting from its application.

Appeals are referred to an independent Appeals Board composed of full-time staff. If the board's decision is unacceptable to the appealing party, the only option is to appeal to the court. However, this happens very rarely. In any case, filing an appeal under no circumstances is a basis for deferring the payment of taxes. Moreover, failure to pay taxes within the appropriate time frame will result in the appeal being cancelled.

New law on real estate cadastre and state cadastral valuation

The relevance of issues related to the organization of state cadastral valuation has increased with the adoption of Federal Law No. 141 of November 29, 2004
"On amendments to Part Two of the Tax Code of the Russian Federation and some other legislative acts of the Russian Federation, as well as on the recognition as invalid of certain legislative acts (provisions of legislative acts) of the Russian Federation", introducing changes to Part II of the Tax Code of the Russian Federation, which came into force in force from January 1, 2006. This law determined the basis for the formation of the tax base - the cadastral value of a land plot - determined within the framework of the state cadastral valuation.

Today at the federal level there is no special regulation in the field of mass cadastral valuation for tax purposes. Separate provisions are contained in various federal regulations of the Russian Federation (Land, Tax Codes of the Russian Federation, Decrees of the Government of the Russian Federation No. 945 and No. 315, Order of the Ministry of Economic Development and Trade of the Russian Federation No. 222), but in general they are not comprehensive in nature and sometimes contradict each other.

The new Federal Law of July 24, 2007 No. 221-FZ “On the State Real Estate Cadastre” came into force on March 1, 2008 (with the exception of certain provisions). This law regulates cadastral registration of land plots, capital construction projects, buildings, structures, premises, etc. According to this Federal Law, the state real estate cadastre is a federal state information resource. The law defines the procedures for maintaining the cadastre and accounting (grounds, terms, objects of accounting, etc.) for the implementation of cadastral activities.

As mentioned above, unfortunately, the provisions governing issues of state cadastral (mass) valuation for tax purposes, i.e. the fiscal function of the cadastre were not included in the text of this law.

It is expected that they will become the subject of a separate law or will be introduced as amendments to the current Federal Law of July 29, 1998 No. 135-FZ “On Valuation Activities in the Russian Federation.”

The main objectives of special legislation regulating issues of state cadastral (mass) valuation for tax purposes should be:

• creation of special legal requirements for cadastral (mass and value-based) valuation;
  
• ensuring coordination between the legal and administrative aspects of assessment, assessment and further administration of taxation;
  
• delimitation of powers and responsibilities of the parties involved in the assessment process;
  
• ensuring interdepartmental information exchange.
  

Experience in conducting state cadastral land valuation

Today, the regulatory framework for the state cadastral valuation of land is made up of Decree of the Government of the Russian Federation No. 945 of August 25, 1999 “On the state cadastral valuation of land” and Decree of the Government of the Russian Federation No. 316 of April 8, 2000 “On approval of the Rules for conducting state cadastral valuation of land."

The Government of the Russian Federation has established general methodological principles for the state cadastral valuation of land, depending on the classification of land according to its intended purpose and type of functional use.

The first round of state cadastral valuation of land for tax purposes was carried out throughout the Russian Federation in the period from 1999 to 2005. In most constituent entities of the Russian Federation, in the period from 2006 to 2007, work has already been carried out to update the results of cadastral valuation of such important (from the point of view in terms of taxes received) categories of land, such as land of settlements and agricultural land.

An analysis of the methods used and the results obtained showed that, in general, most of them comply with generally accepted international standards and principles of mass valuation for tax purposes, very precisely and transparently formulated in the book “Organization of Real Estate Valuation and Taxation” edited by the famous scientist and practitioner of mass valuation Joseph K Eckert.

Prospects and consequences

Many issues related to the further direction of development of the cadastre system in Russia in general (and state cadastral valuation in particular) were covered in detail in the recently published book by the former head of Rosnedvizhimost M.V. Mishustin "Information and technological foundations of property tax administration." This monograph is a convenient and comprehensive information resource containing a broad analysis of various aspects related to cadastre information technologies and issues of property tax administration in Russia based on the new unified system of the state real estate cadastre. Moreover, the state real estate cadastre is considered in this context as a comprehensive integrated multifunctional (electronic) source of official information.

The Unified State Real Estate Cadastre has three main functions - accounting, fiscal and information. All these functions are discussed in detail in the book, including from the point of view of further development and optimization of the property tax administration system.

The book contains many references to international experience in organizing property tax administration systems, as well as analysis of such basic system-forming issues as IT support, cadastre technologies, spatial data management, interdepartmental interaction and information exchange. The author also analyzed the impact of the development of the real estate cadastre system on social development through the support of the system of registration of property rights and the further provision of their guarantees by the state.

The material is structured in such a way as to emphasize the priorities of issues of creating and further improving the property tax administration system. The book analyzes the essence of tax administration, in particular, the main definitions related to real estate taxation and the cadastre system are presented and the main trends in their development are considered, as well as the legal basis of tax administration and the socio-economic consequences of the introduction of a real estate tax. The author also writes about the systematic measures necessary for the successful introduction of a new real estate cadastre system in Russia, taking into account both organizational and technical problems. A number of characteristics and parameters are proposed to assess the effectiveness and efficiency of the implementation of the new system and its further operation.

Considering the fact that the cadastre system was “born” out of the need to implement the fiscal function in many European countries at the end of the 18th century, issues related to this function are considered in great detail. The main tool for its implementation is mass (or, in other words, tax) assessment of real estate. The author examines the main approaches and possible solutions applicable in Russian conditions, taking into account modern international experience in this area, with an emphasis on the issues of institutional structure of the system of state (mass) cadastral valuation for tax purposes.

Prospects

The authors of this article are convinced that over time, procedural and legal issues related to the implementation of the system of state cadastral (mass) valuation of real estate for tax purposes will be resolved and such a system will be successfully implemented on the basis of the new state real estate cadastre. This, undoubtedly, should have a positive impact on the development of regions and municipalities, as well as help resolve issues related to land privatization.

Economic impact of the new real estate taxation system on municipalities in Russia

It is obvious that taxation of real estate (and land in particular) on an ad valorem basis, in addition to replenishing the budgets of municipalities, should and is becoming a means of increasing the efficiency of resource use, primarily urban land. The introduction of a taxation system based on the results of state cadastral (mass) valuation entails a number of important economic consequences for the development of municipalities and the local government system itself.

Consequence 1 – self-determination and financial independence of municipalities. Since land tax revenues are directed entirely or mainly to the municipal budget, municipalities gain greater financial independence and can use such additional funds to solve immediate problems and meet urban needs.

Consequence 2 – competition between municipalities. As a result, competition may arise between municipalities in order to (1) attract business, (2) create more favorable living conditions, or (3) improve social conditions. The consequence of such decisions may be a change in the economic and social structure of cities, their relationships, as well as the emergence of unique distinctive features.

Consequence 3 – privatization of urban land. The land taxation system currently used in Russia can be considered based on market value. Municipalities cannot tax their own land (the land under and around high-rise buildings) while having responsibilities for maintaining order in these areas, etc. As a result, municipalities will be inclined to privatize such land in favor of apartment owners, which will create the basis for the concept of condominiums.

Consequence 4 – creation of a condominium system. Russia's housing stock is generally in very poor condition. Statistics show that the average remaining life of buildings is 15 years.

The condominium concept, as practiced in the West, defines the property as an undivided portion of the land and common areas plus a specific residential unit (apartment). As a consequence, (co)owners of condominiums have obligations to maintain their (all) property in proper order, which should ultimately increase the life of the housing stock in Russia.

conclusions

• Cadastral valuation of real estate, carried out on the basis of a scientifically proven methodology and using adequate unified software, makes an important contribution to the economic development of Russia.
  
• It strengthens the possibilities for financial self-determination of municipalities.
  
• It will improve economic and social conditions in all municipalities.
  
• In the long term, the new system will encourage municipalities to further privatize land and support the development of the concept of condominiums, which will help preserve and extend the life of the housing stock in Russia.
  

Conclusion

The lack of a concept for the institutional organization of assessment for tax purposes and a comprehensive legal framework (federal law) regulating the issues of conducting cadastral assessment (land and real estate) for tax purposes leads to the emergence of a dangerous gap, which in the future will complicate the situation. In particular, this concerns the procedure for appealing the results of mass cadastral valuation, as well as other issues.

Since the technologies and methods for carrying out cadastral (mass) valuation are very complex, valuation procedures should be focused on issues of efficiency and effectiveness of the entire process in order to achieve the basic principle of taxation - legality and fairness in relation to legal entities and individuals. Taking into account the fact that revenues from land tax are a significant source of local (municipal) funding and budget, social issues of determining the tax base are becoming of fundamental importance at the present moment.

The optimal solution is to use mass valuation methods based on a unified methodology using standardized software for calculating cadastral value (based on data on the situation in the real estate market), which will ensure efficiency, continuity, impartiality, and comparability of results throughout the region and the country as a whole. . This task should be solved by a specialized organization.