SVT: The Information Implications

1. Results of the SVT Mapping Study • Preliminary Examination of the Suitability of current Public Information Resources for SVT SVT: The Information Implications Dr. WP Prendergast Lecturer, Department of Spatial Information Sciences, Dublin Institute of Technology Site Value Taxation Workshop in RIAI, 10th March 2010

2. Feasta (The Foundation for the Economics of Sustainability) provided funding for a 10 week study to research the information requirements of the implementation of SVT and the production valuation maps using Irish data • Research was conducted by Ms Elaine Monaghan BA (Geography) & MA (Spatial Analysis) NUIM and supervised by myself and Tom Dunne, Head of School of Real Estate and Construction Economics, DIT Bolton Street • Methodology used was to attempt an evaluation of SVT for a small sub-urban area to indentify and investigate some of the information issues - Dunboyne selected for the study • Research study report to be published next Monday 15th March - electronic version should be available from the Feasta website at www.feasta.org next week SVT Mapping Study - Introduction Site Value Taxation Workshop in RIAI, 10th March 2010

3. Study was restricted to dwelling houses in the sub-urban area of Dunboyne because: • the calculation of valuations for commercial properties (retail, office and industrial) was considered too complex and beyond the scope of this short term study • there was a lack of valuation information for agricultural properties within the selected area. • One off houses were excluded due to their unsuitability for comparablevaluation techniques • The www.MyHome.ie and www.Daft.ie websites were used to source details of properties for sale in the town - some overlap between both websites - this information was expanded to a final sample size of 44 properties using property lists from local auctioneers SVT Mapping Study - Methodology Site Value Taxation Workshop in RIAI, 10th March 2010

4. SVT Mapping Study - Locations of Sample Sites No sample points in other areas Many sample points in some areas Site Value Taxation Workshop in RIAI, 10th March 2010 Base maps courtesy of Ordnance Survey Ireland

5. SVT Mapping Study - Data required for Re-building Costs • Substitute Site Coordinates for Address • Compute Floor areas using OSi building areas & reduce by 20% for Eaves & Walls • Reduce Asking Price by a factor to give Market Value - 10% used Site Value Taxation Workshop in RIAI, 10th March 2010

6. SVT Mapping Study - Computation of Site Value • Society of Chartered Surveyors insurance guide used to compute re-building costs - negative Site Values computed for 6 properties - these were given a value of €20,000 - inherent base land value?? • One Site Value (highlighted above) nearly twice the next highest (€163, 359) - property type and area did not warrant this high valuation, so excluded from further analysis Site Value Taxation Workshop in RIAI, 10th March 2010

7. SVT Mapping Study – Results A Photographic ground survey in Jan 2010 to identify similar house types Site Value Taxation Workshop in RIAI, 10th March 2010

8. SVT Mapping Study - Results B Identifies different housing developments by different developers 2 valuations for detached houses and 3 valuations for semi-detached Site Value Taxation Workshop in RIAI, 10th March 2010

9. Mean value per m2 applied Provides a better indication of the relative values SVT Mapping Study - Results C Some errors in the data - 2 or 3 property areas combined Site Value Taxation Workshop in RIAI, 10th March 2010

10. Results are considered inconclusive because of lack of involvement by local auctioneers (critical) within the short time period available for (a) areas of the town which the selected sample did not cover, and (b) advice to amend methodology used to take account of local nuances - This could be overcome with additional time and further funding • However, the study was able to identify some of the critical information necessary to compute Site Values & implement SVT • Site Details - area, address, geo-code, owners name, owners address • Building Details - type, stories, floor area, & link to site • Valuation Details - pre bubble or mean market value & link to site • ZoningDetails - as it applies to individual sites • Infrastructure Details - proximity to public services - impact on value? • This information was then used to assess the suitability of official government information resources in supplying the information necessary to implement a property tax based on Site Value in Ireland SVT Mapping Study - Conclusions Site Value Taxation Workshop in RIAI, 10th March 2010

11. OSi maps & Geo-Directory ûor LR maps & folios ü • Boundary differences - non OSi detail & ownership to centre of road • Area & geo-code from digital maps & property address from folio, but areas derived from non-conclusive boundaries - accuracy enhancement • 1.9M properties registered - 88% of total & 93% of land area - missing 12% in Registry of Deeds (0.2-0.3M) SITE Details - Area, Address, Geo-code & Link • Extend CFR to 24 Counties on 1/1/2010 • Dublin & Cork ? • Significant to complete Site Value Taxation Workshop in RIAI, 10th March 2010

12. It is assumed that landowners, not occupiers, will be responsible to pay the Site Value tax • Names of landowners should be available via a link to the spatial definition of the parcels/properties within the land registration system, but Ireland has a dual system - Land Registry & Registry of Deeds • Land Registry should be able to supply names of current landowners (1.9M), however the data may not be up-to-date due to current practices, such as transfers to developers taking place without registration to eliminate the need to pay stamp duty (NAMA legislation expected to close this loophole) and farms passing from generation to generation without registering new owners • Registry of Deeds can only identify the names and addresses of ‘reputed owners’ after much searching of paper documents (0.2-0.3M) - self assessment by landowners in Registry of Deeds?? SITE Details - Owners Names & Addresses & Link Site Value Taxation Workshop in RIAI, 10th March 2010

13. Ireland does not currently have a ‘Buildings Register’ from which this information can be sourced • Geo-Directory (jointly owned by An Post & Ordnance Survey Ireland) contains a ‘geo-code’ for all buildings and a postal address and ID for 1.87M properties which includes 196,000 business addresses (Jan 2010) • Property Registration Authority estimate 2.1 - 2.2M properties & many properties have multiple buildings, so why the mismatch of figures? - many properties & buildings without postal addresses excluded from Geo-Directory • Recently three academics (DIT, NUIM & UCD) estimated that there are approximately 0.3 - 0.35M unoccupied dwellings in the State • Major information deficiency for methodology using residual valuation technique - so initial implementation may need to survey BUILDING Details - Type, Stories, Floor Area & Link Site Value Taxation Workshop in RIAI, 10th March 2010

14. Valuation Office û - valuations of commercial lots only for collection of rates by Local Authorities • Residential properties halted in 1978 arising from an election promise and agricultural properties on foot of Supreme Court ruling in 1983 • Valuation based on original Griffiths valuation of 1840s and extrapolated forward in time now being replaced by modern market rental valuation - revaluation proceeding slowly & some reluctance to accept new valuations • Properties may be sub-divided into several lots by different occupiers • Stamping Office in Revenue Commissionersü receive declarations from solicitors for assessment of stamp duty • Details supplied include - date of transfer, names, addresses and PPSNs of vendors & purchasers, address & folio number of property being transferred and the price paid • Solves two problems identified in Dunboyne study - supply actual prices paid rather that asking prices & historical data (to date?) VALUATION Details - Good Market Value & Link Site Value Taxation Workshop in RIAI, 10th March 2010

15. SVT applied to all land including State land? • Zoning designations used to discriminate between higher and lower value uses • Light blue areas are zoned residential - open space and public roads are zoned as residential - who pays the tax on these? • SVT to stimulate re-zoning / de-zoning to limit tax liability - creation of LAPs has started this already ZONING Details - land Use designation & Link Site Value Taxation Workshop in RIAI, 10th March 2010

16. SVT: Information Implications - Conclusions • Link?? - all of these information systems use different property numbering systems - integration of this information will require the harmonisation of numbering systems across multiple Departments or the development of a Cross Reference Register • Link?? - all of these information systems use different object/feature definitions - integration of this information will demand agreement and adoption of common object definitions • Best approach may be a phased approach • PPP between public information resources and property professionals to quickly gather the missing data required for initial launch of SVT • Develop new specification for future data holdings - INSPIRE compliant • Co-ordinated and accelerated programme to complete the databases to the new specification • Programme of quality enhancement of database information in collaboration with property professionals - declarations, surveys, etc Site Value Taxation Workshop in RIAI, 10th March 2010

17. Significant information issues for implementation of SVT - however these should not be used as obstacles, but as a challenge to integrate these core national Land Administration Systems - perhaps establish SVT project as a flagship project under EU INSPIRE Directive to provide stimulus to collaborate? • SVT should provide a goal to complete database conversion and database integration within an urgent timeframe - needs to be resourced (re-deployment), managed and co-ordinated with Ministerial responsibility (across Departments) for successful outcome • Dunboyne study although short was very useful to identify some of the data and data integration issues - more research required • Needs to think of the data from two perspectives - the data required to initially launch SVT and in the longer term the data required to make the system more robust to withstand appeals SVT: Information Implications - Conclusions Site Value Taxation Workshop in RIAI, 10th March 2010

18. Many thanks for your attention Dr. WP Prendergast Lecturer, Department of Spatial Information Sciences, Dublin Institute of Technology patrick.prendergast@dit.ie Site Value Taxation Workshop in RIAI, 10th March 2010