IMPACT ANALYSIS OF THE LAW ON DIMINISHING RETURNS ON THE MASS APPRAISAL OF REAL ESTATE IN THE REPUBLIC OF MOLDOVA

Abstract

The present study investigates the short- comings of the linear models of massive evaluation of real estate in the Republic of Moldova, currently used to determine the taxable value, the author noting, in particular, the influence of the distortion of the calculated values, within the mathematical modeling and the need to respect the law of diminishing returns. The challenges are relevant for countries with an ad-valorem taxation system, such as the Republic of Moldova, which needs to harmonize its national legislation with the criteria for joining the European Union. The study uses the system of mass evaluation of real estate properties in order to identify and develop optimization solutions for the massive evaluation system of real estate properties, in order to tax them, by implementing log-linear models, with effective results compared to existing linear regressions. By benchmarking performance metrics between linear regressions from existing and refined models, the research improves the taxation system through more accurate methodologies.

Keywords

• equitable value
• massive asses- sment
• mathematical models
• estate tax
• log linear regression
• evaluation principals