e le market value of real estate - sas institute · 52 niet te controleren, locowaarde binnen vork...

Federale OverheidsdienstFINANCIENService Public FédéralFINANCES

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1

Market value of real estate

Guy Hofman

Gérald Henskens

October 9th, 2014


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Outline

• Context and issue

• Solution

• Increasing performance

• Watch out

• Return on investment

• Future improvements


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Contexte and issue

• One of the missions of Patrimony Documentation

= fiscal control on declared value of real property in

deeds and declarations

To prevent and fight fraud in the matter of

registration duties and inheritance taxes


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Contexte and issue

• Detection of dubious property transactions

• Establish correct market value of conveyed property

different categories : land, house, apartment, …

situation : anywhere in Belgium

indication of priority for control


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Solution

• Modelling real property data

only houses and apartments

multiple regression with 11 objective parameters

o Situation : street or zone

o Type : villa, bel-étage, serial construction, bungalow, …

o # facades

o # floors

o Year of construction


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Solution

• Modelling real property data

multiple regression with 11 objective parameters

o Quality of construction

o # garages

o # entities for families

o # rooms (apartment) or Surface area (house)

o Total useable floor surface

o Date of valuation


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Solution

• Elimination of extremes

• 1 formula for every municipality

blok-zonegeo-zoneval afdeling nsr cc1 cc2 cc3 cc4 cc5 cc7 cc8 cc11 cc13 cc14 perc.opp. datum VERKOOPWAARDE Vork Laag Vork Hoog

405804 11001 310 40 a 2 n 1935 n 0 3 225 371 546 23/04/2014 323.648 297.050 350.24700000405804 AARTSELAAR 0,92 1,08

00405804 AARTSELAAR 0 11001

11001H00405804 02

279.715 AARTSELAAR 11001

AARTSELAAR

AARTSELAAR

40

AARTSELAAR

a AARTSELAAR 2n

AARTSELAAR

n

AARTSELAAR

0

AARTSELAAR

3 tuinopp.

AARTSELAAR 1100100310 321

AARTSELAAR 1100100310

11001 11001 280.000

285.225 283.561 280.000

AARTSELAAR

40

AARTSELAAR

A AARTSELAAR 2N 1.935

AARTSELAAR

N

AARTSELAAR

0

AARTSELAAR

3 321

283.561 279.715 260.394 247.192 268.450 85 285.225 189.133 340.000 371 546 4496 137.641 298.116 7.225

20.214.0

16

Coeff.

gem SEE intercept leeftijdsq cc14_sum day1 day1sq leeftijd prcc1 prcc11 prcc2 prcc34 prcc7 prcc8 cc14sq oppAkte3

oppakte3s

q

prgembl

okzone

AARTSELAAR 23440,92213

-

171426,282

1 12,53121762 1285,136009 0 0

-

2943,4647

6 0 0,355347881 0,254264912

0,347336

94 0 0 -1,710614027

92,462411

83 0

0,30745

12 323.648


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8

Solution


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Solution

• Calculated market value with minimum/maximum

based on Standard Error of the Estimate

• Every 2 weeks import of new transaction data

• Selection of possibly dubious transactions with

theoretical return


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Increasing performance

• SAS environment with training and coaching

• ‘Translation’ of the mathematical model

using E-guide

• Recruitment of dataminers

• Automation

• Support of external consultants


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11

Watch out

• Business understanding

• Data understanding

• Data quality and cleaning

• Sponsoring by managers for implementation

• Feedback from users


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Return on investment

• Potentially recovering 200 million euros in lost

property taxes per year (only houses and apartments)

Code Statuscode betekenis Aantal verkopen Percent verkopen Aantal erfenissen Percent erfenissen

1 Geen controle venale waarde, op basis van type inschrijving 46 0,03% 126 0,15%

2 Geen controle venale waarde, op basis van verstreken termijn 1.061 0,80% 2.355 2,72%

3 Geen controle venale waarde, op basis van type opsteller 2.905 2,20% 515 0,59%

4 Geen controle venale waarde, op basis van voorafgaande schatting 0 0,00% 1.964 2,27%

5 Geen controle venale waarde, op basis van vast recht 544 0,41% 0 0,00%

6 Geen controle venale waarde, op basis van nultarief 4.059 3,07% 4.810 5,55%

41 Te controleren, Geen mathematisch model beschikbaar 48.681 36,81% 32.058 37,00%

47 Te controleren, Mathematische waarde niet berekend 8.989 6,80% 7.498 8,65%

51 Niet te controleren, Locowaarde boven bovenkant vork 18.575 14,04% 4.646 5,36%

52 Niet te controleren, Locowaarde binnen vork 30.003 22,69% 14.464 16,69%

61 Niet te controleren, Locowaarde gelijk onderkant vork 694 0,52% 511 0,59%

62 Te controleren, Locowaarde kleiner dan onderkant vork, geen tarief beschikbaar 137 0,10% 204 0,24%

63 Niet te controleren, Theoretisch rendement kleiner dan 400 euro 2.194 1,66% 3.302 3,81%

64 Te controleren, Theoretisch rendement tussen 400 en 1000 euro 3.103 2,35% 3.477 4,01%

65 Te controleren, Theoretisch rendement groter dan 1000 euro 11.267 8,52% 10.714 12,37%

132.258 100,00% 86.644 100,00%

Transacties juni 2013 to december 2013


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Return on investment

• Dissuasive effect : unwanted behaviour decreases

dramatically when people realise how we select and

control


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14

Future improvements

• More input from real estate agents and Regions

> from 11 to 25 parameters

o Energy Performance Certificate

o Solar panels

o Kitchen equipment

o Sanitary equipment

o Urbanistic possibilities

o Mobility possibilities

o Level of maintenance


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Future improvements

• Extension of the ‘population’

> all buildings

• Use of another technique

> State Space Modeling

> Dutch example ‘Hierarchical Trend Model’


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Hierarchical Trend Model

• Used by Dutch administrations for tax purposes

• Based on Time Series

• Explains the value of real estate by housing

characteristics, location and time

• Hierarchy of trends:

– Common trend

– Location based trend

– Building type trend


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Hierarchical Trend Model

• Location based and building type trends modelled as

deviations from the common trend

• Housing characteristics are time-invariant

• Log(price) = influence of characteristics

+ level common trend

+ level location based trend

+ level building type trend

+ error term

Copyr i g ht © 2013, SAS Ins t i tu t e Inc . A l l r ights reser ve d .

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e le market value of real estate - sas institute · 52 niet te controleren, locowaarde binnen vork...

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