1. Mass Valuation System Vilnius 03.-05.06.2015.

2. Latvia Territory – 64 589 km2 Local government - 118 (9 + 109) Inhabitants : Total - 2,013 mil Towns - 1,591 (70%) Rural - 0,753 (30%) Density 34.3/km 2 (166th) Ethnic groups 62.1% Latvians 26.9% Russians 3.3% Belarusians 2.2% Ukrainians 5.5% others

3. Functions of the SLS Cadastre Mass valuation Address Register Cadastral survey of buildings High resolution topographic information Land reform Land consolidation Restricted territories IS 3

4. Cadastre IS  Land: textual part – since 1992 graphical data – since 1995  Buildings: textual part – since 1996 graphical data – since 1999  Groups of premises – since 2000.

5. Dynamics of registration 5

6. Market data collection. Central database (Oracle ) Create data storage for Online analytical processing (Oracle Discoverer) XML automatic data processing Central database (Oracle ) Create data storage for Online analytical processing (Oracle Discoverer) XML automatic data processing 2011 2004 2000 1998 1997 28 separate Database (Fox Pro) Info - municipality Tax payer Land Register 28 separate Database (Fox Pro) Info - municipality Tax payer Land Register Questionnaire lists: Municipality Land Register Excel spread sheet 28 offices Questionnaire lists: Municipality Land Register Excel spread sheet 28 offices Land Register Only Data exchange with XML file Land Register Only Data exchange with XML file WEB service Land Register - SLS WEB service Land Register - SLS

7. Sales data flow 7 Land Book CadastreCadastre Market DB Sale date Sale price Seller/Bayer Object Object characteristic, location - Data cover all country -Data receive each day -70-80% fully automatically stored in DB; other – manual processing

8. Mass valuation 8 The mass valuation takes place according unified principles for the entire country and is based on the real property market information Normative regulations: National Real Estate Cadastre Law; Regulations Regarding Cadastral Assessment. (1998 – 2006 – Law On Immovable Property Tax) Mass valuation objects:(all objects registered in the Cadastre IS) Land buildings engineering constructions Value is used for: Real property tax Stamp duty from the sale/transfer of property Privatization, rents of state or municipality land, etc

9. 9 Cadastral date (land and building) Value base Value calculation Mass (cadastral) assessment  All property on January, 1st (real property tax)  Calculation process ~ 48 hours  Value base changes - two years Mass (cadastral) assessment  All property on January, 1st (real property tax)  Calculation process ~ 48 hours  Value base changes - two years Mass (cadastral) values calculation in the Cadastre IS Valuation models Cadastral value changes  Online – changing Cadastre object data Cadastral value changes  Online – changing Cadastre object data Value zoning  Rural properties (zonings of agricultural land and forest land)  Residential properties  Industrial properties  Commercial and public property Base value

10. Valuation models 10  Location (zone)  Land use  Land area  standard plot  Restrictions  Location  Land cover (arable land, forests, waters,...)  Quality of agricultural land  Quality of forest land  Restrictions Building land Agricultural land, forest land

11. 11 Valuation models All buildings  Location  Use  Building area  Physical condition  Encumbrances + Detached and semi-detached houses  Different areas (indoor, open space, basement …)  Facilities arrangement (electricity, sewerage …) + Apartment buildings and multi-functional building  The use of premises  For apartment - floor

12. Mass valuation performance 12 RATIO 2014 RATIO 2015

13. 13 Development of mass valuation process 2015-20172011 2010 2007 2006 2001 2000 1998 Data base of real estate market information Land valuation used for tax purposes Land valuation used for tax purposes Law «On Real Estate Tax» Changes – Valuation program included in Cadastre IS Building valuation National Real Estate Cadastre Law Changed process and assessment period National Real Estate Cadastre Law Changed process and assessment period Building value used for tax purposes Dwellings and engineering construction values used for tax purposes Improved building valuation model Process – improved building valuation model (inner quality – declarations)

14. Management experience 14 Process from 1998 Process: Value maps, value base for separate municipality territory In force after the municipal approval For appraisal in force – next January,1 Problems:  Value basis for entire country was not treated at the same time  Unequal situation among municipalities (uniformity, integrity)  Difficult planning of the process and appropriate resources  The procedure of conformation – the municipalities have wide possibilities to influence results

15. The value base actualization year (situation on January 1st, 2006)

16. Management experience 16 Process since 2006 Process: Value maps, value base for whole country – 4 year cycle In force after Cabinet of Ministers approves For appraisal in force – next January,1 The SLS – calculates projected values for each object for next year (object data actuality– June, 1st) and publishes results (predicted values for next taxation year) in Internet. Owners (if interested) examine predicted value, object data (the characteristic data is possible to update until December, 31st).

17. Changes in process - 2015  Changed value revision cycle – cadastral values must be revised once in two years  Defined value reference date – 1 July – one and a half year before values will come in force for taxation  Defined value level – 85% of market value  Public involvement – taxpayers will be able to submit a complaint before approval procedure in the Cabinet of Ministers 17

18. Now (Municipality) Future improvements Determination of land use 18 Future (State Land Service) Cadastre IS Territory Planning IS Restricted Territories IS Territory Planning IS – the permitted use – settlements; building density (intensity); allowed height/floor;… Restricted Territories IS – communication, roads, restrictions (particularly, construction)… Cadastre IS – land parcel borders, area, buildings location, building type, building area … 119 municipalities shall take a decision Complex appeal process Often land use objectives are not changing Automated IT system Manual - Administrative acts

19. Future improvements Land cover updating Now: Land cover – from land surveying plan Water regime (drainage systems) for agricultural land – from amelioration cadastre Future: Intersection of maps - Forest Service, the Rural Support Service, Geospatial Agency

20. Future improvements building data collection Now: 68% MAX survey = outside + inside 32% MIN (till 2003) survey = outside Future – Remote sensing data analysis Owners declaration

21. Problems Politicization of values e.g. values of agricultural land will come in force in 2016, not in 2015 as planned Financing of Cadastre IS improvements valuation models additional programming needs Lack of permanent financing for data collection and update data in Cadastre is outdating and don’t reflect the situation on site. 21