Edition 2020 Ninth edition

"Recurrent property taxes remain low in a majority of Member States and there 
may be scope to increase them, while avoiding negative redistributive impacts on 
low-income households. In countries where the current systems of housing taxation 
rely heavily on transaction taxes, an internal shift from transaction taxes towards 
recurrent taxes could also bring efficiency gains."
(Tax Policies in the European Union: 2018 Survey)
1.4. 
The Commission's Country Reports for the European Semester 2019 specifically 
remark on the low levels of recurrent property taxation (using 2017 figures) in:
•
Austria at 0.5% of GDP but the third highest share of labour taxes in 
total revenue;
•
Estonia at 0.3% of GDP where "property … taxes could be used to finance a 
further shift away from labour taxation";
•
Finland at 0.8% of GDP where "real estate taxation reform has been postponed" 
until 2022 at the earliest. Values, updated by a construction index, were below 
Market Values with the gap widening;
•
Latvia at 0.8% of GDP;
•
Lithuania at 0.3% of GDP with no further changes planned;
•
Slovakia, seeing a figure of 0.4% of GDP as "an indication that Slovakia may be 
underutilising property … taxation as revenues";

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European Valuation Standards 2020
IV. - EVIP 2: Valuation and Other Issues for Recurrent Property Taxation
241
•
Slovenia at 0.5% of GDP;
•
Spain where recurrent property taxation raised 1.2% of GDP.
2. Defining the properties
2.1. 
Such a tax relies on a full and current list of taxable properties so that each can 
be identified. The valuer will need sufficient detail of the property to assess it and 
for it to be useful as a comparison when considering other properties. That detail 
will need to include the property's nature, floor area, accommodation and layout.
2.2. 
As properties are improved, their use changed or new properties created, so a 
system will be needed to ensure that the register is updated for these changes, 
triggering valuations as appropriate.
2.3. 
The lack of complete records of the Mapping and Surveying Authority was one 
of the arguments put to the Slovene Constitutional Court in spring 2014 when it 
ruled that a new real estate tax was unconstitutional as it did not determine the 
value of property clearly enough. Defects in Russia's cadastral register delayed the 
proposed introduction of a property tax there. It is understood that the register in 
Cyprus was distorted by buyers delaying the registration of properties into their 
names to avoid the associated charges.
3. Valuation
3.1. 
In principle, the establishment or periodic updating of the tax base in a developed 
country with administrative capacity is a conventional valuation exercise, albeit 
on a very large scale.
3.2. 
It may be handled by national or local government agencies, whether using in-
house valuation departments or retaining external valuers. The valuers' skills are 
applied to the properties recorded on the register of properties. The register 
needs to be maintained so as to provide a comprehensive and accurate base for 
the tax.
3.3. 
The process needs an established and clear basis for the valuation — whether 
capital or rental, on what assumptions, on Market Value or other basis. This is 
needed not simply to aid the task of the professional valuers concerned, but to 

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IV. - EVIP 2: Valuation and Other Issues for Recurrent Property Taxation
European Valuation Standards 2020
ensure taxpayer confidence in the system with the important requirement that it 
be clear that all are assessed fairly. That transparency should apply to the proce-
dure as well as to the basis of valuation.
3.4. 
In order to provide a generally agreed common basis for such valuations, European 
Valuation Standards 2020 defines "Market Value" in EVS 1 as: