on it are recorded in separate registers but, with building registries the responsibility of local rather than central government, makes it impossible to easily link the two and value property even if prices for structures are reported. An integrated address or building register, fully interoperable with the cadastre, is thus needed to extend mass valuation to residential land. While establishment of such a register across the country is envisaged, piloting relevant procedures with local governments that have already established such a register would be desirable.

Finally, to the extent that predicted prices are to be used for tax purposes, the transition from NMV to mass appraisal based on market prices can significantly alter individual taxpayers’ bills or local communities’ property tax revenue. A carefully designed strategy for a smooth transition is thus essential when moving to a new tax base, ensure financial stability, and prevent substantial budget losses during the transition.<sup>29</sup>

# **5. Conclusion and policy implications**

By providing estimated land values for about 7 million agricultural parcels, this paper demonstrates that the preconditions for a market-based valuation system of land and property in Ukraine are in place. Ukraine's advanced digital transformation in public registries, particularly the mandatory state registration of property rights in centralized electronic systems like the State Land Cadastre and the State Register of Real Property Rights, provides a robust foundation for such a shift as it enables efficient collection and rapid processing of transaction information, including prices and property values, which is essential for accurate market assessments and fostering transparency.

Our analysis illustrates both the viability and the greater flexibility and equity of a market-based approach to land and property valuation that can increase fairness in taxation; streamline private investment and direct it toward areas with the highest returns; and discourage speculative land holding by allowing capital gains to be reliably measured and taxed fairly. To institutionalize transparent and reproducible market-based valuation, three steps may be considered: _Data Standards and Data Sharing Protocols:_ The exercise presented in this paper would not have been possible without a legal basis mandating documentation of land sales prices by registrars, the establishment of necessary software, and the publication of such data. Routinely valuing agricultural land will require using data from official sources held or acquired by entities like the State Land Cadastre, such as cadastral maps, soil composition, topographic features, crop cover, and administrative boundaries. These may be complemented with information from other sources if based on a replicable methodology, especially to value agricultural land for personal use that may have buildings or structures affecting land value.

> 29 For example, the normative valuation of industrial land in Ukraine is often significantly higher than its market value, while residential land in cities may have a normative valuation several times lower than its market value. Therefore, a gradual transition to the new tax base is necessary, including a transitional period and adjustments to tax rates to mitigate potential negative effects on both taxpayers and local government revenues.

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