Mass appraisal of real estate objects is used all over the world and is an economic and logistical necessity. Despite all the variety of mass valuation methods used around the world, the concept based on the market value of land remains unchanged. In many countries of the world, real estate valuation methods have been adopted and its standards have been defined.

In the world community, there are two main systems for determining the value of objects for the formation of a taxable base:

• 1) a system for determining a fixed predetermined value established by the state - a standard value established by regulatory legal acts of bodies of various branches of government: from state to municipal;
• 2) a system of mass assessment of objects of taxation, based on the determination of the cadastral value, based on the market situation of the land market.

In various countries of the world, a mass valuation system based on market value began to be applied even before the beginning of the 20th century:

• - until 1900 - in Belgium, Germany, Switzerland, Great Britain;
• - in 1900-1950 - in Denmark, in Cyprus;
• - in 1950-1990 - in Austria, Finland, France, Iceland, Sweden;
• - after the 1990s - in Armenia, Azerbaijan, Belarus, Estonia, Georgia, Latvia, Lithuania, Holland, Romania, Russia, Slovenia.

Let's get acquainted in more detail with the experience of mass assessment and taxation of some countries.

The experience of mass real estate appraisal in the USA

In the United States, real estate taxation is a tool for financing the activities of government agencies, so the collection of taxes on real estate is the responsibility of government agencies.

The system of government in the United States is similar to the one in Russia: there is a federal level of government and a level of state government. Property valuation is carried out in each state in accordance with the legislation adopted in it. The states are divided into counties, which in turn are divided into municipalities. The mass evaluation system is organized along this line of three divisions. Although the assessment is carried out at the local level (county, municipality), the laws of the relevant state apply in its implementation. The state, through its legislation, determines the type of value that should be used.

The main tasks of a real estate appraiser include maintaining up-to-date cadastral maps (detection of new real estate objects, accounting of old ones) and lists of cadastral numbers (in this case, the lists are compiled in accordance with the classification of the property: residential, commercial, industrial, agricultural, forest for agricultural needs, forest, undeveloped and other), as well as the assessment of all properties that fall under city or municipal taxation. Revaluation of property takes place annually due to the need to maintain compliance of the calculated cadastral value with the market value.

There is no standard for requirements for the level of education and experience of appraisers-officials, so each employer puts forward their own. These requirements may include a bachelor's degree in economics, business or finance, experience in real estate valuation, passing the USPAP knowledge exam and mass valuation methodology, etc.

The tools that American tax assessors use in their work are collectively called "mass assessment methods." The methods used for the mass valuation of real estate are different from individual approaches to determining their value. However, mass appraisal does not exclude the use of classical approaches to the individual determination of the value of objects. At the same time, it should be mentioned that at the level of some states it is legally prohibited to adhere to the cost and income approaches in the cadastral valuation of certain types of property. For example, in the state of Colorado, the tax assessor is required by law to evaluate real estate veins to rely solely on a comparative approach.

The discovery of computer systems and software with the ability to store, analyze and process supermassive amounts of information made it possible to use the data of many analogous objects. This option is the basis of the modern system

Computer Aided Mass Appraisal (hereinafter referred to as CAMA), which is used by US tax assessors.

The construction of a market model using the CAMA system can be divided into three phases:

• 1. Data collection. A list is compiled with information about the object, location and other data that may affect its value. In particular, information about transactions includes data on the date of sale, the value of the transaction, an inventory of movable property included in the transaction, unusual circumstances of the transaction, and other information. Based on the collected data, a correct cadastral register of all sold properties is compiled, as well as objects for which the offer price is known. In addition, a list of "justified" transactions is compiled (i.e. those in which both parties were on an equal footing and there was no conflict of interest).
• 2. Compilation of the CAMA model. The estimator uses various methods, such as linear or multiple regression analysis, trend analysis, other statistical techniques and techniques, and their modification. A key role in the modeling process is played by constant testing of the model for the correctness of predicting the cost of objects. Usually this problem is solved by comparing the market value of objects with the average value proposed by the CAMA model.
• 3. Approbation of the model. As part of this stage, using the resulting model, the cost of all real estate objects of a certain class or subclass of real estate is calculated.

Testing is a mandatory and statutory requirement for models created by appraisers. In the state of Colorado, an appraiser is required to perform two statistical tests in order for his or her work to be recognized. Both tests include peer-to-peer market matching, which compares the CAMA value (also referred to as “tax assessor value”) to the property's adjusted market value.

The first test involves calculating the median ratio of analogues {Median Sales Ratio). To determine it, the coefficient of analogues for each object in the database is calculated as the ratio of the value established by the tax appraiser and the adjusted market value of the object. Based on the ranking of the obtained coefficients, the median coefficient is calculated. Colorado law requires the median ratio for properties such as unoccupied land, commercial property, and improved residential property to be between 0.95 and 1.05 for each property class.

The second test takes into account the spread factor calculated as follows. The established median ratio is subtracted from the ratio of each item sold. The result obtained is called the absolute deviation (regardless of whether it is negative or positive). Next, for each object, the average absolute deviation is calculated, which is then divided by the median coefficient. The spread factor, by law, must be less than or equal to 15.99% for improved residential property and less than or equal to 20.99% for vacant land and commercial property.

Both tests were created to fulfill the task of ensuring maximum compliance of the calculated values ​​of objects with the market ones. The main goal is to achieve cost equality for the maximum possible number of objects within the same class. These tests are often applied to subclasses of objects to test the predictive capabilities of the CAMA model.

Based on the results of the mass assessment, a register of taxable property is prepared, which immediately after compilation is subject to mandatory placement in the public domain. After the Board of Assessment Review (BAR) has reviewed and ruled on all appeals and made changes, the final edition of the taxable property register is issued.

The register is available for free review at any time until the end of the appeal.

Each owner independently monitors the level of taxation of his property. Complaints must be filed before the end of the appeals period.

Appeals regarding the revision of the results of the cadastral valuation can be sent in three cases.

• 1) In case of receipt of a notification of the results of the cadastral valuation, containing information about its old and new value. Property owners usually receive such notification once every three years. Those wishing to file an appeal due to disagreement with the assessed value of the property must send a signed appeal by return letter within 45 days. Next, the date of the in-person or absentee hearing of the appeal is set.
• 2) The owner of real estate has the right to fill out a petition before January 1 if his property has not been appraised over the past two years, and during this period of time events have occurred that could reduce the value of the object. The completed form is mailed to the cadastral valuation department. After that, a face-to-face or absentee hearing is scheduled.
• 3) In case of purchase of real estate in the period from January 1 to June 30. In this case, you can send an appeal within 60 days from the date of transfer of ownership. After that, an in-person or absentee hearing is also scheduled.

The sequence of actions of the property owner on appealing the results of the cadastral valuation is as follows.

In the first step, the property owner submits the grounds of appeal to the tax assessor appointed by the Supervisor of Assessments. These grounds must be as convincing as possible. For example, owners can draw on data about similar objects that can be obtained from a number of sources: cadastral valuation departments, information about transactions available in real estate companies, the media, personal observation results. In the information about the disputed object, it is necessary to check all aspects, especially the mathematical and physical correctness of the indicated data.

Further, hearings on the case are organized, based on the results of which the cadastral valuation inspector makes a decision. If the owner does not agree with him, he can appeal to the Board to challenge the cadastral valuation. The appeal must be filed within 30 days of the last decision.

The Council is an independent body of three (or more, depending on the state) members. Each member must be qualified and experienced in tax administration or valuation. As a rule, such specialists as a tax expert, a lawyer and a real estate appraiser are represented on the Council.

The list of analogous objects, which the cadastral valuation department will present as evidence at the hearing, can be obtained by the plaintiff for review if he fills out the appropriate application 15 days before the date of the hearing.

Finally, if the claimant is not satisfied with the Board's decision, they may file an appeal with their state's Tax Court within 30 days of the Board's last decision on the challenge. The tax court is an independent body appointed by the governor of the state.

In case of disagreement with the decision of the Court, the plaintiff sends an appeal to the higher courts (Superior Court of the State, State Court of Appeals, followed by federal courts).

Thus, the mass appraisal system for real estate tax purposes in the United States has a lot of accumulated experience. The special advantages of this system are:

• - implementation of assessments at local levels in accordance with state law;
• - constant updating of information about real estate objects (once a year);

• - testing the valuation model before recognizing its results;
• - maintaining a register of taxable property in the public domain;
• - Possibility of challenging the results of the mass assessment.