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Moroz Alexandra

Mining and Geological Faculty

Department of Geoinformatics and Geodesy

Speciality Land management and Cadastre

Analysis of scientific and methodological approaches for automating the normative monetary assessment of non-agricultural land beyond the boundaries of settlements

Candidate of Technical Sciences, Associate Professor Hermonova Ekaterina

Resume Abstract

Abstract

Content

• Introduction
• 1. Theme urgency
• 2. Goal and tasks of the research
• 3. Analysis of land legislation on monetary valuation
• 4.Standard monetary valuation in GIS
• Conclusion
• References

Introduction

Land as the basis of economic, social, industrial and other activities has a cost, and an adequate assessment of land is one of the important conditions for the normal functioning and formation of the economy. A significant role in shaping the sustainable development of this sphere is played by the creation of land resource assessment methodologies that can take into account all the spe-cific factors of land issues.

1. Theme urgency

The relevance of the topic is the development of technology for the mon-etary valuation of land in settlements, as well as the search for appropriate principles of market relations approaches to the practical implementation of cadastral valuation of land in the DPR.

The topic of work fits into the scientific research of the Geoinformatics and Geodesy Department of DonNTU. For example, at the Department of Geoinformatics and Geodesy for more than 10 years, research has been con-ducted aimed at improving the methods and technologies of regulatory mone-tary valuation of land for taxation. To date, according to the results of these studies, 2 Ph. D. and more than 10 master’s theses have been defended (Krivo-bokov MG, Kuz-netsova DS, Revdannik DA, Chayka AG, Chesnokova MA, Supenko S .S. And others.).

2. Goal and tasks of the research

The purpose of the work is the creation of new and application of stand-ard geographic information system tools for automating the process of regula-tory monetary valuation (RMV) of land in small and medium-sized settle-ments.

Tasks:

analysis of the world experience of monetary valuation of land set-tlements for taxation with further substantiation of its scientific and methodological approaches on the territory of the DPR. (Stage I);

development of algorithms for individual stages of the RMV of lands of settlements and the development of new tools to automate the assessment process (stage II);

using the example of the town of Enakievo, to test the developed new ArcGIS tools for the automation of RMV. (Stage III).

The result of the master’s work should be a new technology, based on the ArcGIS 10.2 platform, which will significantly reduce labor costs and reduce appraisers errors.

The use of land in the DPR is paid. Payment for land is charged in the form of land tax or rent, determined depending on the regulatory monetary value of land, the accuracy of which depends largely on the quality of the ini-tial information.

3. Analysis of land legislation on monetary valuation

In accordance with the «Provisional Regulation on the Tax System of the DPR,» prior to the adoption of the relevant regulatory legal documents, the calculation of land charges, submission of reports and payment of land charges in the country is carried out in accordance with the requirements and rates (taking into account the established benefits and peculiarities) the tax system of Ukraine as of 01/01/2014 [3].

At the same time, the annual indexation of RMV of lands, provided for by art. 138 Law of the DPR «On the tax system», until 01/01/2019 is not im-plemented.

RMV indexation coefficient of land for which the normative monetary value of agricultural land, land of settlements and other non-agricultural land has been indexed, calculated in accordance with art. 138 of the DPR Law «On the tax system», as of 01/01/2017, amounted to 1,034, as of 01/01/2018, it was 1.005 [2,4].

However, when forming your own land tax system in the DPR, you must first pay attention to solving problems that exist for a long time in the land tax system:

underdevelopment of the land market;

insufficient financing of land management measures due to the low level of state control over the use of revenues from land charges;

low economic efficiency of tax benefits.

In developed countries of Western Europe and America, which have a developed market for land and real estate, a massive land valuation is applied for taxation, the mathematical model of which is based on market data. In the countries of Eastern Europe that emerged after the collapse of the USSR, vari-ous ways of mass appraisal were chosen for land assessment: cadastral (Rus-sian Federation, Belarus, etc.) and regulatory monetary valuations (Ukraine). The objective of these assessments is to determine the value of land of immov-able property for the creation and operation of a unified taxation system for all real estate objects, in particular, land (fig.1) [7].

To substantiate the choice of the theoretical base of the monetary valuation of land in the Donetsk region, the results of which will be used for taxation, an analy-sis was made of the existing types of land valuations and their peculiarities were revealed.

We begin with a discussion of mass valuation methods in the framework of a comparative approach (fig. 2). Ideally, this method should look like this. Suppose land plots are estimated that are close in location and are identical in basic charac-teristics. For such an assessment, within the framework of the comparative ap-proach, it is necessary to have some statistics on sales of similar objects due to the fact that the land plots that are identical in their basic parameters differed in area and location. So, the average value (or median) of these prices can be viewed as a mass estimate, and the process of obtaining this estimate is the method (more pre-cisely, one of the methods) of mass estimation. Thus, in the methods of mass esti-mation, the individual features of the object, the uniqueness of each of them are ignored, and the conclusions obtained (for example, the specific cost) equally apply to each of the objects from this group.

Currently, to determine the cadastral value of land and other real estate objects, mass valuation methods are used based on a sample of data on sales of land plots and other real estate in the entire territory being assessed.

The lack of a state cadastre system is associated with unjustified expenses of citi-zens, as a result of the work of the system. According to the latest changes in tax legislation, real estate tax is calculated on the basis of its cadastral value. Despite the fact that, according to the law, the cadastral value today should not exceed the market value, in practice, the valuation mechanism makes it possible to obtain an overestimated cost, which leads to a multiple tax increase [6].

This situation, in the first place, is simply unfair, since citizens and businessmen pay a tax that is too high several times, and are compelled to dispute their personal right to fair taxation for their money. Secondly, a business that owns real estate suffers greatly, and commercial real estate tax is often too high (fig. 3).

The basis of the RMV is the capitalization of rental income, obtained depending on the location of the settlement in the national, regional and local production and settlement systems, the arrangement of its territory and the quality of the land, taking into account the climatic and engineering-geological conditions, architectural and historical -cultural value, ecological condition, and functional land use (fig. 4).

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