Abstract
Global economy is going through difficult and challenging times. Europe and especially the countriesof the south are facing enormous fiscal difficulties, rising unemployment, dropping wages and cutbackson social expenses. Greece is entering its sixth year of depression and the consequences aremore than obvious in every aspect of social, professional and economical life.Real Estate used to be one of the capstones of the Hellenic economy, but since 2007 its contributionto the GDP has dropped dramatically. Instead of implementing solutions towards the recovery ofthe Real Estate market, Hellenic State is increasing the levy by enforcing new taxes to thetransaction, improvement, use and even possession of Real Estate property, resulting to thesimultaneous existence of more than 40 different individual property taxes, leading to the“criminalization” of property owning. Except from the taxes on transactions (purchases,inheritances, donations) and the periodical taxation (on total properties’ ...
Global economy is going through difficult and challenging times. Europe and especially the countriesof the south are facing enormous fiscal difficulties, rising unemployment, dropping wages and cutbackson social expenses. Greece is entering its sixth year of depression and the consequences aremore than obvious in every aspect of social, professional and economical life.Real Estate used to be one of the capstones of the Hellenic economy, but since 2007 its contributionto the GDP has dropped dramatically. Instead of implementing solutions towards the recovery ofthe Real Estate market, Hellenic State is increasing the levy by enforcing new taxes to thetransaction, improvement, use and even possession of Real Estate property, resulting to thesimultaneous existence of more than 40 different individual property taxes, leading to the“criminalization” of property owning. Except from the taxes on transactions (purchases,inheritances, donations) and the periodical taxation (on total properties’ value), extra taxes havebeen added (tax on all electrified properties etc) as well as additional dues (for “legalising”improper constructions, issuing energy‐efficiency certificates, issuing certificates for irregularitiesfreeproperties etc)In Greece, Property Sales Data is not public. In fact, only very few specific people get to know theprice of a transaction which is a secret between the seller & the buyer. If a Real Estate Agent isinvolved he probably knows too, while if a Bank is financing the loan, they just know the valuationand the requested loan. Given that there is no operational Computer Assisted Mass Appraisal,taxation until 1985 had been subject to negotiation between the tax authorities and the owners.Since 1985 the taxable values on which taxes are imposed are called “objective values” and are calculated according to the “Real Estate Values Objective Calculation System”, a Mass TaxationSystem, assigned with base (zone) values within Municipalities, as well as few basic quality factorsaugmenting or reducing the initial values. It is a generic, non‐flexible tool, periodically updated(mostly the base values of each zone) by a committee, producing taxable values irrelevant to themarket values, and consequently being used as a land‐policy tool. The system was designed to beupdated every 2 years, but since it invokes great political cost, it usually takes much longer toupdate, with the last update dating back to March 2007. Except from being impossible for thesystem to simulate the function of the market, each update disturbs and intervenes to the market’sequilibrium, since before the update prices go sky‐high and just after the market instantly falls intocomma.The Basis for residential appraisals is usually the Market Value and for certain detached residencesthe Depreciated Replacement Cost. Since the Market Values are not known or registered the Basisfor Real Estate taxation, professional fees, expropriations etc is the “objective” value. Tax oncontracts (transactions) is imposed on the maximum of the “objective” & the transaction value andsurely not on less than the “objective” value. It is obvious that everybody or at least Individuals (notCompanies) state that the transaction price was somewhere near the “objective”, so valuable datais being lost.The Scope of Real Estate Appraisals in Greece usually involves Bank Loans (mortgages), Buying orselling a property, Insuring a property (improvements value), New constructions / repairs /improvements, Consumer loans with property insurance, Leasing / Sale & Lease Back, Revaluations(change of loan terms, change of property characteristics, periodical according to legislation),Auctions, and Mortgages to cover loans not being paid‐back.Appraisals in Greece, are mostly carried‐out by the Body of Sworn‐In Valuers who are the OfficialState Valuers, Most Monetary Financial Institutions either in‐house or outsourced depending on the Real Estate section of the Bank, Valuation Companies and International Real Estate Houses.Independent Valuers, certified (RICS, REV‐TEGoVA) or not, are mostly Engineers (Surveyors, CivilEngineers & Architects), many Economists and few M.Sc. in valuation (since no B.Sc. available inGreek Institutions).No legal framework on Valuation and Valuers exist, “Real Estate Valuer” specialty is not arecognised profession by the State, no Legal Fees and specific income confrontation from TaxationAuthority apply, there is no specific Code of Ethics, no Valuation Chamber and no other Chamberscan include a Valuer. All the above are partially cured only through certifications Valuers get and byrestrictions within independent professions (i.e.: engineering code of ethics)Until recently “Market values” data could only be found in classified ads and via R.E. Agents,Properties legal & technical data only locally in municipalities, being rare & inconsistent and BasicStatistical data only in the Hellenic Statistical Authority’s tables. Today major steps have been takenas the 2610/2008 Bank of Greece Governor's Act, about compulsory monthly submission of selecteddata from all valuations carried out by MFIs (Monetary Financial Institutions) in Greece, the3979/2011 Law, about free access of all Public Sector Institutions to all Public Sector ICT(Information & Communications Technology) data and about the operation of a free‐access geodataportal and other Independent acts of the Hellenic Mapping & Cadastral Organization, CadastralInstitution, various Municipalities and many other Institutions for the production and disposition ofgeographic data.Despite ‐and because of‐ the crisis and the inactive Hellenic Real Estate Market, Real Estatemanagement tends to mature and become more rational. So, the need is emerging for a moresophisticated, scientific, automated and intervention‐secure system for the mass valuation of real estate values for fiscal purposes. Significant difficulties existing until now ‐lack of public comparabledata, partial existence of Cadastral data and multiple laws‐ finally seem to be overrunable.The Model proposed is mainly developed for fiscal (taxation) purposes, aiming to a more rationalreal estate taxation system. It is designed for central (government) operation with various levels ofaccess, security and functionality and the ability to serve as a reference base for market values anda valuation tool for big real estate portfolios. It could also be used as a Development Tool fornational‐state expropriations, land‐exchange, large‐scale development projects etc, an Analysis Toolusing statistics, producing indices etc and a Land Policy tool, connected to social, economic &geographical criteria.The Basis of the Appraisal System is the Market Value (since input data comprises of assessedMarket Values) and the Fair Value (since final assessed properties are not examined in detail). As forthe Institutional Framework, the most suitable organization for hosting the project seems to beKtimatologio S.A. the Carrier of the Hellenic Cadastre. The System is currently developed forresidential properties, especially since there is no official data for commercial properties. Types ofdata collected consist of Spatial factors as the walking distance from significant POIs, metro stationsetc, Area characteristics as the area’s land‐use and the building coefficients etc and Propertycharacteristics as floor, age, orientation etc.Two different Municipalities have been selected as the study area of the project. Municipality ofChalandri is situated among the Northern Suburbs of the Region of Attica, it is a rather nice livingarea and was mainly selected due to its complexity in terms of land‐use, being residential andcommercial as well, residing among some of the most important avenues of Athens and havinggreat access and public transportation coverage. Voula on the other hand is an expensive coastalresidential area of the Southern Suburbs, is considered a privileged area to live at and finally there isno operational cadastral office.Data collection was a very important and time consuming procedure. The Mass‐Appraisal systemproposed, aims to use all available official data, in order to produce fair and indisputable propertyvalues for taxation purposes. The main contributors were:• The Bank of Greece, providing original data from the submitted valuations by the MFIs in xlsformat with all valuations submitted since 01.01.2009, containing certain fields of about 1650valuations (1150: Chalandri, 500: Voula). The property address was considered sensitivepersonal data and was not provided at first, finally though it was granted, but the addressnumber was altered. There were several problems in data consistency as different correctwritings of the same name, orthographic errors, editing mistakes etc. Existing data washarmonized, and future data was modeled so data entry will be made easy and error‐freethrough proper drop‐down menus and additional fields were added for each of the 4 maximumpossible parcels “faces” of the property. Also, prices indices were used, short/long term, by age,by geographic area, historic series, trends & prospects, transactions. The scattering of the datawas very satisfactory, so it seems to uniformly cover the two areas.• The Hellenic Cadastral Institution (Ktimatologio S.A.) was the second major contributorproviding GIS data (City Boundaries, Cadastral Parcels, Buildings, Street Names), Descriptivedata (PST, ORT, QPT, VST properties’ characteristics tables) and Applications as the “Theasis”extension for ArcGIS (live orthophotos viewing), the DTM and DSM/DEM the official forestryland‐use information and the 3d web‐API access. The Project is under development andproperty data is available only in certain areas, mostly residential. Voula is not one of them (oneof the reasons it was picked). Buildings were registered only in the first pilot projects even themare not updated any more (last update ~1995)• From the Municipalities of Chalandri and Voula, data acquired consists of City Boundaries /Urban Units, City Blocks, Parcels, Buildings, Terms of building (building coefficients etc), LandUse, Points of Interest, Public Transportation, Public Utilities, Open Spaces,Educational/Athletic/Religion Premises, Lots of geographic and consistency problems• The rest of the important contributors are the Hellenic Statistical Authority (from 2001 census)with GIS data 1/5000 scale: blocks, buildings, road axis, GIS data 1/50000 scale: districts,municipalities, settlements and statistical data, demographics, indices etc, the Hellenic Mapping& Cadastral Organization with Orthophotos of scale 1/500, taken in 2010, AdministrativeBoundaries of all levels and Corine Land Cover land‐use polygons, the Athens Urban TransportOrganization, with routes and stations of all public transportation and geodata.gov.gr with allkinds of free geographic data.During the Data Process and Edit, the Coordinate and the Reference System were defined andmodified as the Greek Geodetic Reference System 1987 (GGRS87) on the Geodetic ReferenceSystem 1980 (GRS80) ellipsoid. All geographic data has been registered in Oracle Spatial 11g, whileArcGIS 10.0 & Geomedia Pro 6.1 have also been used for data analysis and map production anddata was organized in File Geodatabases (GIS gdb & Property gdb).The concept was to use all appraised properties data to build a model and then use this model toappraise all the properties of a geographic region. The two datasets have to be identically setup,using the same factors/parameters. The objective was to gather as many factors (location, area andproperty) as possible for each property, in order to statistically analyze them and distinguish thestatistically significant ones. In order to achieve that, all the properties had to be placed on theirgeographic location by geocoding them. Commercial Geocoding Database has been used, though the original data needed much work on corrections. Bank of Greece properties’ location data wascorrected “by hand”. Cadastral and Municipality properties’ location data was more consistent(with substantial errors though), so a “translation table” was created for each of them (Cadastraladdress ‐> NAVTEQ address). Without manual corrections about 75% were “exact match” and 90%were able to get geocoded and acquire geometry. For the rest 10% the main problem was mostlydouble addresses, when a property had access to two roads.All available data should be appended to the existing properties and all dataset properties weregeocoded with the same dataset. All the properties already “carry” some “property characteristics”(floor, area, age, auxiliary spaces etc). Through overlaying with GIS data “area characteristics” areappended (building coefficient, land‐use, urban units etc), while through network analysis “spatialfactors” are appended (distances from POIs, public transportation stations etc). Trough Oraclespatial analysis, the assessed properties can be matched with the cadastral properties, to appendtheir descriptive data as wellNeighbourhood analysis was selected and Regression analysis & Hedonic Pricing model wereapplied. Stata/IC 10.0 for windows statistical software was used, as well as Ordinary Least Squares(OLS) tool (Spatial Statistics) in ArcGIS10, until now with similar results. This stage is ongoing andexpected to be concluded with the completion of the whole project.The operation of the system is meant to function through web‐interface with 3 levels of security,access and operations (users, moderators, administrator) 1. Users:• Everybody (General Public) could be in this level with free access, no user identification,taxation information & payments, submission of objections on personal, property or taxationdata• Registered Users (Valuers, Engineers, Notaries, Lawyers, R.E. Agents) with controlled passwordaccess, with the ability to form queries on mean values of areas or/and property types• Certified Valuation Institutions or Individuals (Body of Sworn‐in Valuers, Banks, Certified Valuers(RICS/REV), Insurance Companies) with controlled access following certification, monthlyvaluations’ submission, queries for specific property data & values, indices etc2. Moderators:• Bank of Greece with controlled access to all CAMA functionality, acceptance & quality control ofvaluations, econometric analysis, new data entry into the system, model calibration & testing,export of statistics & indices and REVALUATION of properties every 1 or 2 years• Ktimatologio (cadastre) S.A. with controlled access to all GIS functionality, integration ofproperty & geographic data of all institutions (phase 1), acceptance & processing of objectionson property data and development of new applications.• Ministry of Finance with the implementation of a modern taxation system based on thesystem’s values, through fair tax coefficients, accurate taxpayers profiles and e‐governmentgood practice in tax calculation, notification & collection.3. Administrator:• Ktimatologio (Cadastre) S.A. because of the up‐to‐date spatial & descriptive properties’ data,the raster & vector geographic information, the many applications developed & maintained andmostly because of and the vast technical expertise gained over the yearsx. Other Users as Institutions using properties’ information (Municipalities, Public PowerCorporation, Hellenic Statistical Authority) and Institutions providing periodical data to thesystem (Municipalities, various Ministries, Urban Transport Organizations etc)A proposals aiming to improve the current System & Mass Appraisal accuracy would surely includeincorporation of More Data, both in the Bank of Greece’s data and Cadastral data, such as theposition of the property on the floor, the orientation, “green” technologies etc. Also data comingfrom the analysis of the definition of the “view” factor, through a 3d model analysis, such as parkview / sea view / landmark view (spatial analysis), open view (DEM‐DTM subtraction or max floor’sheight). And finally more environmental factors implementation, such as pollution maps, noisemaps etcFinally a Full Model Automation would upgrade the system, as well as the use of WebGIS, forexample through ArcGIS Server.The idea to develop an integrated GIS & CAMA system for Residential Properties’ Taxation in Greecearose early in the 00’s mostly out of research interest, but recently became a necessity consideringthe need to make property taxation more accurate and fair. A strong suggestion by the Troika(European Commission ‐EC‐ the International Monetary Fund ‐IMF‐ and the European Central Bank ‐ECB‐) who was established in Greece as a Technical Consultant is to leave the “objective” values and to move to a system more capable of simulating the market.
show more
