WAARDERINGSKAMER The three key principles for mass appraisal: Data Quality, Data Quality and Data Quality Ruud Kathmann Marco Kuijper Land and Poverty Conference 2016 Tuesday March 15, 2016

WAARDERINGSKAMER Program Introduction Information: 1.derived from the system of base registers 2.derived from real estate ads 3.specifically collected for mass valuation 4.derived from interaction with taxpayers Maintaining the accuracy of object characteristics Concluding remarks March 15, 2016Land and Poverty Conference 20162

WAARDERINGSKAMER The Netherlands March 15, 2016Land and Poverty Conference 20163

WAARDERINGSKAMER The Netherlands 12 provinces390 municipalities22 polderboards March 15, 2016Land and Poverty Conference 20164

WAARDERINGSKAMER Some facts 17.0 million inhabitants Area: 41,526 km² (16,221 square miles) Almost 9 million residential and non-residential properties Total value: € 2,100 billion More than € 10 billion tax revenues based on the assessed value Total costs for appraisal and assessment: € 150 million March 15, 2016Land and Poverty Conference 20165

WAARDERINGSKAMER Property taxes National revenue officeMunicipalityPolderboard Tax rate (residential):0.3% (0,5%) 0.2% (average) 0.05% (average) March 15, 2016Land and Poverty Conference Tax rate (non-residential):-0.5% (average)0.05% (average)

WAARDERINGSKAMER Act for real estate assessment In Dutch: “Wet WOZ” Formal base for: –the Netherlands Council for Real Estate Assessment The assessment of all real estate Only for the assessment not for the taxes Implemented in 1995 Owners and users are officially informed Part of municipal tax bill March 15, 2016Land and Poverty Conference 20167

WAARDERINGSKAMER Netherlands Council for Real Estate Assessment In Dutch: Waarderingskamer Main task: quality control of mass valuation Involved parties –municipalities (390) –polderboards (22) –national revenue office Council board has 11 members Staff 20 persons Minister of Finance is responsible March 15, 2016Land and Poverty Conference 20168

WAARDERINGSKAMER Valuation process Important! 1.Decentralized valuation process 2.Centralized quality control 3.Annual valuation of market value 4.Mass appraisal systems 5.Uniform working procedures 6.Uniform quality standards 7.Uniform valuation report March 15, 2016Land and Poverty Conference 20169

WAARDERINGSKAMER Valuation process Interaction Residential property Non residential property IT Data managementProfessionalism March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Data management 1.Information derived from the system of base registers 2.Information derived from real estate ads 3.Specific information collected by municipalities 4.Specific information derived from interaction with taxpayers March 15, Land and Poverty Conference 2016

WAARDERINGSKAMER System of base registers March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER System of base registers Cadastral registration Registration of buildings Registration of addresses Registration of inhabitants Registration of non-inhabitants (foreigners) Registration of companies Large scale base maps Value of real estate March 15, Land and Poverty Conference 2016

WAARDERINGSKAMER Benefits of base registers With a system of base registers the government: can offer rapid and good services will not be misled will experience improved confidence of citizens will operate very cost efficiently March 15, Land and Poverty Conference 2016

WAARDERINGSKAMER Information derived from real estate ads More than 200,000 houses for sale Several systems available on the internet March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Information derived from real estate ads March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Information derived from real estate ads March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Crawling market ads Central system Systematic registration of primary characteristics derived from ads Comparison with base registers Saved for future use –including all pictures March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER March 15, Land and Poverty Conference 2016

WAARDERINGSKAMER Information needed Primary characteristics –Building year  –Size  –Location  –Annexes and property features  Secondary characteristics –Quality  –Maintenance  March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Specific information Size: 120 m 2 Year of construction: 1850 Size parcel: 600 m 2 Size: 120 m2 Year of construction: 1850 Size parcel: 600 m2 March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Annexes and property features March 15, Land and Poverty Conference 2016

WAARDERINGSKAMER Specific information Collection of this information can be done through: fieldwork interaction (online) questionnaires (automated) desk research –aerial photo’s, streetview, etc. March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Standards for data used Registered data in accordance with reality Registered data must explain value differences –Same characteristics, same value Check property every 5 years (IAAO standard) Annual survey of data quality March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Maintaining the accuracy of object characteristics At least 30% of total costs Essential for appraisal model Essential for taxpayer’s trust Responsibility of the appraiser Requires efficient risk-based procedures –Control protocol object characteristics (see appendix 3 of paper) March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Concluding remarks Good object characteristics are essential for an accurate mass appraisal It is also essential to have uniform definitions and instructions for measuring Uniform definitions for the characteristics registered are highly important Definitions for secondary object characteristics are much harder to determine and use March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Concluding remarks Sharing information with other government and non-government organizations makes the appraisal process more efficient Interaction with taxpayer is efficient and helps improving trust The accuracy of object characteristics needs continuous attention of the appraiser Quality of object characteristics is an important topic for operational audits March 15, 2016Land and Poverty Conference

WAARDERINGSKAMER Questions March 15, 2016Land and Poverty Conference