LADM based taxation model in Montenegro: Using BIM in taxation process

Abstract

Real properties plays an integral role in the economy of every country. Considering this, property valuation and taxation processes are of great importance. Revenues from property taxes can be allocated to other areas thus improving the quality of life for all citizens. Since the valuation and taxation are related to properties themselves, the good cooperation between real estate cadastre and tax administration is necessary. Real estate cadastre submits current data on real properties and rights to them to the tax administration. These data and additional data on properties and their locations are then used to form a tax for citizens to pay. In the paper, an analysis of the legal regulations and laws, as well as the way of functioning of the current information system for the tax administration in Montenegro is performed in order to develop LADM based tax administration model. Developed model is an extension of previously developed LADM country profile for Montenegro. Based on the new model, an information system for tax administration is developed and all relevant procedures prescribed by the ‘Law on property tax’ (2019) and ‘Regulation on detailed criteria and methodology for determination of real property market values’ (2011), are implemented. The most important procedures are how to define the value of the property or how to calculate appropriate taxes. The basic criteria for determining the value of real properties are average market price per m2 of real property, purpose of the real property, size of real property, the place where the real property is located, quality of real property and other elements that may have an impact on the market value of real property. Every municipality defines the coefficients that correct the main formula for tax calculation. The new buildings have a BIM model created in a design phase which is a part of the documentation for issuing a building permit. Such BIM model can be used for at least two other purposes in addition to basic use. The first one is to serve as an input for 3D cadastre. Another reason is the use of BIM to calculate taxes. Data such as the area of the building and the quality of the building (building construction, building facade, windows, number of rooms, installations, number of bathrooms, etc.) can be directly loaded into database from the appropriate BIM model. Such solution can be resolved by expanding the regulative and the law to allow the use of this data. In the paper, the authors presented the mapping of entities from the BIM model to the appropriate code lists of the building quality and other attributes defined by the national regulation which are used to calculate tax. In this way, the tax calculation process would be accelerated and automated because the data from the project documentation would not be entered manually but would be taken over from BIM.