or decades to complete <mark>(D'Arcy and Nistotskaya 2018).</mark><sup>5</sup> Building footprints are now available freely or can be generated from high-resolution satellite imagery or, at city scale, drones (Gevaert et al. 2020) at minimal cost,<sup>6</sup> eliminating the need for costly and complex aerial photography (Carolini _et al._ 2020).

The use of such imagery to update property tax rolls and improve fairness of taxation by minimizing tax evasion in Italy led to large increases in collection of local property taxes. Beyond providing economic benefits, this also pushed up rates of incumbent re-election. Political returns were higher where public goods were provided efficiently and where tolerance for tax evasion had been lower at the start (Casaburi and Troiano 2016). Since 2004, <mark>Bogotá has been a pioneer in introducing policies of land taxation and land value capture, to very positive effect (</mark> Garza and Gonzalez 2021).

_Automated valuation based on market prices._ Once the universe of taxable properties is identified, a transparent and fair process for determining each property’s tax liability needs to be established, ideally distinguishing land and buildings. Automated computer-assisted mass valuation (CAMA) involves regressing price data on property characteristics and using the coefficients thus obtained to generate property-specific predicted values. CAMA can overcome the disadvantage of flat rates and is thus a preferred option (Hill 2013). Beyond data on property characteristics and coordinates (Diewert and Shimizu 2022), it requires price data that are ideally obtained from registry records or, if these are not available or distorted due to high transaction taxes, sample enumeration that can be checked against other data sources, such as listings of high-end properties.<sup>7</sup> The potential of CAMA is illustrated by the mass valuation of properties in Rwanda, which suggests that a 1 percent ad valorem tax could increase revenue up to tenfold and be more equitable (Ali _et al._ 2020).

Since the 1990s, institutional mechanisms to allow low-cost implementation of CAMA models have been adopted (Gouriéroux and Laferrère 2009) and are now routinely used in most developed countries, with positive impacts on revenue and the perceived fairness and transparency of property taxation. In the Netherlands, valuations of some 8 million properties via CAMA are conducted annually, yielding 2.8 percent of GDP in revenue from real estate taxes. Assessed property values are publicly available, improving market functioning and preventing fraud (for example, related to mortgages), owners can update their data online, and interoperability provides additional benefits (Kuiiper and Kaathman 2015).<sup>8</sup> A

> 5 The Swedish cadaster was launched in 1530 and achieved complete national coverage in 1628. Greece still lacks a functioning national cadaster. This variation is associated with vast differences in tax discipline and trust. <mark>Even a decade ago, establishing tax maps for individual cities in World Bank–supported projects took years, as the example of Tanzania shows.</mark>

> 6 As the use of drones is not always well-regulated (Stöcker et al. 2017), obstacles to their use may be more regulatory than technical. 7 Registry records can be used if land markets are sufficiently representative and liquid and if transfer taxes do not discourage truthful land value declaration. Ben-Shahar _et al._ (2020) propose a method to identify transactions suspected of underreporting. They apply this to all transactions in Israel over 1998–2015 and conclude that some 8 percent of transactions are underreported, with an average price that is 30 percent below the projected true price.

> 8 In Europe, owners’ estimated property values are about 9 percent above assessed values, ranging between 3.2 percent in Germany and 22 percent in Italy, a discrepancy that can partly be explained by household characteristics, in particular the level of indebtedness (Le Roux and Roma 2019).

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