FIG Commission 9 - Valuation and the Management of Real Estate

Term 2011-2014

Highlights Commission Chair2011-2014
The work plan has focused on three highly relevant themes. Dr. France Plimmer, RICS, United Kingdom
  • Property taxation which recognises the social and economic value of real estate and provides revenue (normally) to fund public services, for the benefits of the wider community.
  • Large scale land acquisition for agriculture, which follows on from the highly successful previous four years work on compulsory purchase and compensation, and is investigating the issue of land grab – a highly topical and controversial issue causing international concern, as well as severe individual and social hardship in relevant communities. It is anticipated that this work should link into the interests of the wider international community, thereby providing opportunities for inter-organisational collaboration; and finally,
  • The management of public property assets in developing countries with a view to presenting guidelines on best practice for the public sector management community.
Work Plan

Terms of reference

  • Valuation, being the estimating of value of all kinds of real estate by valuers and appraisers for various purposes, including market value, property taxation, eminent domain, investment, redevelopment and refurbishment, and for both public and private purposes;
  • Investment in real estate, investment planning and real estate investment vehicles;
  • Real estate finance, development finance, land use feasibility planning;
  • Real estate economics, markets and market analysis;
  • Management of all kinds of real estate at all levels;
  • Asset management for corporate private and public sectors;
  • Management of the use of buildings to ensure optimum benefits to occupiers.

Mission statement

The mission of Commission 9 is:

  • To advance the professional practice of valuers and property managers working in all areas of real estate valuation and management;
  • To research and publish ?best practice? for the benefit of valuers and property managers in different jurisdictions and sectors of the industry, for the benefit of the surveying community and to improve our services to the wider public;
  • To facilitate and generate the exchange of information, knowledge and experience between surveyors for the benefit of the profession, our clients and the wider public;
  • To publicise and promote the work of surveyors to the public, particularly to young people, governments and non-government organisations and to enhance their perception of the value of surveyors and the services they can deliver, especially in support of the global sustainability agenda and the Millennium Development Goals;
  • To co-operate and work with fellow surveyors in all specialisms of the profession to further the objectives of FIG.
 

Work Plan

 
     
Key Documents

 

Publications

 

Working Group 9.1 - Property tax

Policy Issues

Property taxation is ubiquitous ? there are very few countries which do not impose some kind of tax specifically on land and / or buildings. It is usual for such a tax to be levied, collected and spent by local authorities, even if the rate of tax is fixed by a higher tier of government, but this is not always the case.
The working group will comprise three study groups, the work plans of which are presented below.

  • Study Group 9.1.1 - Tax Bases

Policy issues

Land taxation policy includes many aspects.

  • On the one hand, land taxation should bring fiscal revenues. Which is tax base is most easy to administer and to assess? Which tax base is justifiable? Which brings sustainable and high fiscal revenues? Will the tax be accepted by the tax payers? Particularly for valuation purposes it has to be asked whether the tax is levied annually and in a comprehensive way (as the property tax) or only occasionally (e.g. betterment tax). Does it make sense to use the same tax base and the same valuation methods for different sort of taxes (land taxation, income tax, property transfer tax)? Especially if the tax is levied annually and in a comprehensive way, mass valuation is necessary. Mass valuation always faces a trade-off between efficiency and justice. Hence, group 9.1. A will work in close co-operation with group 9.1.2.
  • On the other hand, aspects beyond fiscal revenues also have to be considered. Land taxation is discussed more and more as a tool for land use policy and settlement policy. It is required to support land use planning and ecological targets. Is there any trade off between the targets to be taken into account? Are there any distortions of the market to be considered? These and other questions need systematic analysis and examination. Maybe different answers have to be given for different institutional environments.

Moreover, different countries have different stages of institutional development and governance. Is there one size that fits all? Or do different stages of development, different cultures etc. have to be taken into account?

Co-chairs

Working Groups
Prof. Dr. Dirk Löhr,
GERMANY,
e-mail: d.loehr[at]umwelt-campus.de

 

Prof. Dr. Fabian Thiel,
GERMANY
Email: fabian.thiel[at]fb1.fh-frankfurt.de

 

  • Study Group 9.1.2 - Mass Appraisal Systems

Policy issues:

  • Valuers contribute to an efficient, effective and socially acceptable property tax in their role as assessors of the tax base. Technical valuation skills support appropriate methodologies, in particular, the use of Computer Assisted Mass Appraisal (CAMA) techniques, as well as ensuring improved access for the public to relevant information, advice and data.
  • However, the use of mass appraisals involves a degree of technical skill and knowledge which is beyond the understanding of the average taxpayer and which may involve a trade-off between efficiency and ?justice?. This therefore imposes an additional responsibility on the valuation profession to ensure that the highest degrees of equity and ?fairness? are achieved within the limitations of the technology, and that acceptable levels of explanation and reassurance are available to all parties, particularly taxpayers.
  • This working group will investigate and publish appropriate guidelines for the development of mass appraisal techniques to support property tax assessments, including the appropriateness original data sources (property characteristics, sales, rents, yields, costs asking prices, or valuations) and of indices to monitor the property market, which will be particularly useful during the current economic climate.

Chair

Varnavas Pashoulis
CYPRUS
E-mail: var[at]cytanet.com.cy

 

  • Study Group 9.1.3 - Successful and Efficient Taxation Systems for Emerging Economies

Policy issues

  • This working party will investigate property tax systems in emerging economies focusing on a case study approach, seeking examples of best practice.
  • Regions of interest for the sourcing of case studies are likely to be South America, and potentially Africa and Central and Eastern Europe, depending on interest and data availability.

Chair

Steven Nystrom
USA
E-mail: nystrom[at]tampabay.rr.com

Working Group 9.2 - Large Scale Land Acquisition for Agriculture

Policy Issues

  • This working party builds on the earlier of 2007-2010 Working Group 9.1 (Compulsory Purchase and Compensation in Land Acquisition and Takings, led by Professor Kauko Viitanen), which has resulted in the Hanoi Declaration (FIG Publication 51) and the Compulsory Purchase and Compensation. Recommendations for Good Practice (FIG Publication 54).
  • There remains an appetite within the Commission 9 delegations to continue FIG work in this area and, of increasing international concern is the related topic of land grab, being the acquisition by foreign corporates of productive farmland from indigenous land holders. Certain international organizations has expressed concern about the possibility of exploitation.

Chair

Dr. Ibimina Kakulu
NIGERIA / UNITED KINGDOM
E-mail: ibkakulu[at]hotmail.com

Working Group 9.3 - Management of Public Property Assets in Developing Countries

Policy issues

This working group will investigate fixed public property assets within developing countries with a view to establishing how such real estate assets are managed and to develop ?best practice? guidance within such environments. This working group will focus on management issues, rather than legal frameworks (which vary between countries); and it will not cover the technical, computer tools involved in management.

The programme will cover three components:

  • documentation, defined as the permanent process of collecting, preparing, evaluating, and updating of the necessary information. The working group will seek to define a generalised and simplified data structure for fixed public assets in combination with recommendations for a professional inventory system;
  • administration, to define the needs, duties and responsibilities of a property management unit in public administration (principles, tasks, organisation, equipment, personnel etc.). This will reflect on the clients of property management and their needs; the organisation of processes; and the definition of the interfaces to the clients and other processes; and
  • operation of public properties. Recognising that the operational costs during the life cycle of real estate are higher than the original construction costs, the working group will consider the following issues:
    • the principles/responsibilities of public/corporate real estate management;
    • optimising the use of public properties;
    • optimise/reduce the operational costs (e.g. cleaning, maintenance, rebuilding, energy, waste, insurance, security catering);
    • optimisation of occupancy;
    • development/redevelopment of public properties;
    • increasing economic revenues;
    • capacity building of staff;
    • cost transparency; and
    • the creation of a consistent documentation system for the operating processes.

Chair

Dr.-Ing Ingolf Burstedde