Download Effects on the macro economy of more or less effective Land

Impact on macro economy of an
efficient Land Administration
WPLA workshop in Athens 2012-12-13
Roger Ekman
Lantmäteriet, Sweden
Namn Efternamn, 2017-05-12, Plats
Cadastre and Land Registry
• The importance of systems for
registering changes in
ownership/tenure is well known
• Fundament of the market economy
• Secured tenure is necessary for
will to invest in improvements
• Secured ownership to land as
collateral for credits
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Just to have or have not?
LA efficiency
Have
Where in the
economy?
Have not
Effects on the economy
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Where do we find the effects?
• What is the impact on the economy of a more or
less efficient Land Administration?
• How is the property market affected?
• Is the enterprise in general affected?
• What are the consequences on the public finances?
• Can we estimate the effects in numbers?
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The property market
Interest expenses
Value of transactions
per year:
€ 22.000.000.000
A registered property often serves as a
collateral for credits financing the
conveyance, without this collateral you may
have to pay higher interest rates due to
bigger risk. (0,01% of 22 billion is 2,2 million)
• Missed opportunities
During the period of registration the
conditions for the market will change, to the
better or to the worse. If your purchase is
motivated by a certain market situation, you
are likely to make a loss.
• Slowdown
With more expensive and time consuming
transactions the property market will work at
a lower pace
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The enterprise in general
Market value of real property:
€ 1.000.000.000.000
Volume of GNP:
€ 430.000.000.000
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An enterprise that undergo a
change will probably need to
adjust its property use. A slower
working property market will
delay the enterprises adaptations
to changes in demand,
rationalization etc. High
transaction costs will work in the
same direction. In the end,
decreased competiveness.
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The public finances
Volume of state and
municipal taxes:
€ 200.000.000.000
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• The income and company taxes are
proportional to the competitiveness
of the enterprises and thus their
ability to employ people.
• The property taxes will increase with
higher values on properties
• The conveyance of properties is
taxed and a delayed transaction will
cause interest expenses for the
state (€ 100 000 per extra day)
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Conclusion
• The Land Administration’s level of efficiency
has a large impact on a nations macro
economy, and not only the property market
• Land administration regulations, procedures
etc should above all be designed to facilitate
secure, simple and fast conveyance of
property
• The costs for not having straightforward
cadastral and land registration processes are
immense
• A research project is discussed in Sweden to
quantify the effects
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