16 because people do not report the real transaction prices. The situation is similar
for notary fees. It would be better to base fees to notaries on other parameter than reported price for example on assessed value multiplied with some factor or to
have some kind of fixed fee per transaction. Similar calculation is also compatible for transfer tax. If people report the real transaction prices the tax rates could be
decreased but the state and local authorities receive the same revenues from the taxes.
There will also be problems if carry through a fair valuation with market values for one region but not for others. The relation between the assessed values
in the region and market values may be fair. But in comparison with the values in other regions will not be fair, especially not as long as the tax rates are the same.
To find information about real prices, interested parties have to use other sources than reported prices from PPAT. In urban areas this can be done through
advertisements. PBB partly uses this way to work. In rural areas advertisements are not a common way. To get more information on real price, interview with
buyers or people such as head of village in rural areas is more effective. The quality of the collected market data is very important for the
valuation. There is general rule garbage in garbage out . If collected information about prices and characteristics for sold properties is not reachable, the result of
the valuation will probably be the same.
b. Value zoning
INLA Project performs value zoning through a process. The process is a kind of iterative work where there is a need of both knowledge of the market and
17 values of land parcels but it also use reliable sales. It start with large roads. The
highest prices are found along roads with a lot of traffic or other places where there are a lot of people in movement. For every value zone there shall be a set up
of rules for the valuation of parcels belonging to that value zone. Firstly the norm value for the standard plot in Rupiahm2.
The principle of value zoning: The influence of location is dealt with value zoning. Each value zone has a unique identity. Value of land zones
determined by delineation the same market data. Therefore the value zone will be
shown in the value maps.
c. Value for an individual parcel
The next process after value zoning is how to calculate value for an individual parcel. The other value factors shall be used. To set up valuation rules
for a certain value zone in the study area is as the following: Norm value 600.000 Rupiahsm
2
1 Road class 1,0 0,6 0,3 2 Land use 1,0 0,8 0,6
3 Infrastructure 1,0 0,8 0,6 To calculate the value for an individual parcel the formula will be the following:
Value of the parcel = Norm value Size Road class factor Land use class factor Infrastructure class factor
If the parcels locate in 2 two or more value zones, the value of parcel will be calculated as follow:
18 Figure 1. Illustration of the parcels located in two or more value zones
Value of the Parcel A = {Norm value zone 1 Size} Road class factor Land use class factor Infrastructure class factor
Value of the Parcel B = {Norm value zone 1 Size zone 1} + Norm value zone 2 Size zone 2}} Road class factor Land
use class factor Infrastructure class factor Where: Parcel A in one value zone, Parcel B in two value zones
The result of INLA Project: The model does not focus on all value factors affecting market value. Some factors are not common way, or sometimes the
value factor is of exceptional proportion, and is therefore excluded from the model. If this affects market value significantly, than there are possibilities to
adjust the value derived from the model. For adjustments there is a need of manual work. This is costly and there can be rules for when adjustments shall be
possible to carry through.
Zone 1 Zone 2
Parcel A Parcel B
road
19
2.5. Geographic Information System
