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Development of M ass V aluation S ystem in Estonia

Development of M ass V aluation S ystem in Estonia. Andres Juss Tallinn University of Technology 02.06.2004. Background. Involved in assessment since 2000, working at Estonian National Land Board Participating in different seminars (OECD Property Tax seminar 2000, 2001, 2003, 2004)

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Development of M ass V aluation S ystem in Estonia

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  1. Development of Mass Valuation System in Estonia Andres Juss Tallinn University of Technology 02.06.2004 ERES 2004

  2. Background • Involved in assessment since 2000, working at Estonian National Land Board • Participating in different seminars (OECD Property Tax seminar 2000, 2001, 2003, 2004) • Knowledge of assesment in Denmark, Finland, Sweden, Latvia, Lithuania ERES 2004

  3. Land Valuation I • Based on market value • building right • highest and best use • standard plot • 3 valuation techniques, internationally acceptable principles • zoning • land use types ERES 2004

  4. Land Valuation II • Valuation results are used in • Taxation • Privatisation • Expropriation • Land consolidation • Compensation of illegally expropriated land ERES 2004

  5. Land Valuation III • Mass Valuations - 1993, 1996, 2001 • National Land Board responsible for assessment • National Tax and Customs Board responsible for collection • Local Government for taxpayers’ information • Revenue in 2003 ~29 million EUR , 100 % to local budgets • Totally ~1000 land value zones and ~5000 agricultural land zones (based on soil fertility) ERES 2004

  6. Values of Residential Land in Tallinn ERES 2004

  7. Weakness of Current System • Frequency • Could buildings be taxed too • Too many institutions involved • Computerisation ERES 2004

  8. Valuation Frequency • Not in law • Mass Valuations - 1993, 1996, 2001 • Mathematics-next 2008 • Comparison of market value and taxable value in 2004 - 70% of land sales prices over 2x higher • Political reasons-elections ERES 2004

  9. Land Tax vs Property Tax • Tax burden is relatively low-20 EUR annually per person • Valuation of buildings • Political decision • Database about buildings • Economically effective? ERES 2004

  10. Responsibility • Local Governments are responsible for taxpayers’ information and calculation of taxable values? • 240 municipalities-240 databases • Proposal one central database • Calculation of taxable values-by keeper of land cadastre-75% of land in register ERES 2004

  11. Computerisation • Computerized database and sales maps available • Special tool for creation of zones? • Multiple regression analysis? ERES 2004

  12. Thank You! Andres.Juss@maaamet.ee ERES 2004

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