State Property Reviews | Article published in Out of the box, March 24, 2015.
State Property Evaluations
Was recently published Ordinance 96/2015 of 16 February which aims to establish the general criteria in the valuations of state properties.
The reading of the document induces a certain disappointment, as it was expected to be more enlightening and to point out some clues about what will be the evaluation of the properties of the State. This did not happen, but even so, there are some aspects of the diploma that deserve comment.
First, because the concerns expressed regarding the legal and documentary regularization of properties and the requirement that external assessments carried out by experts registered with the Securities Market Commission (CMVM) should be commended.
And at this point, there is a disagreement with what is stated in the ordinance. This adds that as they have already been carried out by Human Resources who work in the General Directorate of Treasury and Finance (DGTF).
The competence of these technicians who work for the State, who are so often wronged, is absolutely recognized. However, one of the main requirements of the heritage assessment activity, which is independence, is hurt. In fact, appraisers should not have any material connection or involvement with the property under assessment or with the contracting entity.
This aspect should have been considered, not least because it contributes to greater transparency of the State and its relations with taxpayers.
It also seems correct that the general evaluation criteria accompany the Legal Regime of Real Estate Investment Funds (RJFII) and, in the alternative, CMVM Regulation 8/2002, although it is feared that the adaptation of this regulation, which is the responsibility of the Director General of the Treasury , can distort what good evaluation practices are.
This matter, as well as the issue of remuneration due to technical evaluators, was referred to later ordinances.
It is also interesting to note that the evaluation methodologies and procedures, with regard to the State, vary according to circumstances.
In the case of State property, this ordinance expressly stresses “… provided for in the Legal Framework for Real Estate Investment Funds. It was understood that this regime adequately safeguards the interest in determining the value of properties for the purpose of a transparent and rigorous protection of the State’s patrimonial interests, as it is based on demanding criteria and adapted to the financial and patrimonial management of public resources, having as reference the respective market value, which seems appropriate to maintain ”.
In the real estate valuation of individuals and companies, within the scope of the Municipal Property Tax and the foreign aid program, this concern was not relevant, allowing a general assessment of the property made in a hurry, without rigor and poorly remunerated.
Likewise, the concern is also not maintained when the Expropriation Code refers the estimate of an approximate value to the market value to an ordinance fixed administratively and to rules that have no sustained approximation to reality.
As we see, for a reality – to evaluate heritage – three different weights!
Property valuation is not a complicated matter, it has well-defined rules. Depending on the purpose of the valuation, the corresponding value basis is found, for example, market value or fair value.
Then, there is nothing more than applying the methodologies used in the evaluation of real estate, that is, the comparative market method, the income method or the cost method.
Good deals (real estate)!
For the State, for companies, for taxpayers … with consistency.
Likewise, the concern is also not maintained when the Expropriation Code refers the estimate of an approximate value to the market value to an ordinance fixed administratively and to rules that have no sustained approximation to reality.
As we see, for a reality – to evaluate heritage – three different weights!
Property valuation is not a complicated matter, it has well-defined rules. Depending on the purpose of the valuation, the corresponding value basis is found, for example, market value or fair value.
Then, there is nothing more than applying the methodologies used in the evaluation of real estate, that is, the comparative market method, the income method or the cost method.
Good deals (real estate)!
For the State, for companies, for taxpayers … with consistency.