WASHINGTON, March 16, 2015 — The World Bank’s Board of Executive Directors today approved a EUR 36.2 million loan (US$44 million equivalent) for the Real Estate Management Project for Serbia. The loan will support Serbia in ensuring accurate, complete, and electronically available information on real estate property.
Although Serbia made significant progress in improving its real estate sector over the last decade, its real estate services still lag behind European Union (EU) standards. Investments in geodetic infrastructure are needed, and Republican Geodetic Authority (RGA) services need to be made more accessible to all, including vulnerable groups. The data held by RGA, including on land, ownership, buildings, utility lines, and various forms of maps, is vital information for most government services, and needs to be made complete and more easily available. In addition, while RGA’s mandate has been further expanded to cover activities such as property valuation and building registration, there are concerns about its business model, and, therefore, the sustainability of the services it provides.
“The proposed project supports the Serbian government’s new economic reform agenda, helping it to create a better business environment and new jobs, as well as advancing its European integration,” says Tony Verheijen, World Bank Country Manager for Serbia. “Better access to real estate information will attract investors and reduce transaction cost and time. In addition, development of real estate markets will boost small- and medium-enterprises that use real estate as collateral.”
Property tax yield in Serbia is relatively low, with about 0.6 percent of its GDP collected annually in property taxes, against an average of 1.8 percent in OECD countries. Serbia lacks the complete and accurate data necessary to establish the tax base, it uses outdated valuation methods, and its tax rates are low.
The first component of the project will address these issues by improving the system for annual property taxation through the development of a sales price registry for real estate, software to process data from the sales price registry, and a Mass Appraisal pilot program on property tax rolls and collection procedures in local governments units. The project will also establish a building registry, and will improve the real estate valuation framework by improving the quality of education for valuers and adopting internationally recognized standards for valuation.
The second component of the project will focus on e-governance for enabling access to real estate information, while the third one aims at helping RGA become better and more sustainable institution.