ADVANCED VALUATION

Question;-

Model penilaian massa merupakan kaedah penilaian berasaskan teknik statistik untuk menganggarkan nilai taksiran secara sistematik pada skala dan skop yang lebih besar berbanding penilaian tunggal (IAAO,1978).

- Terangkan kelemahan penilaian tunggal- Bincangkan keunggulan penilaian massa (mass appraisal)- Buat kajian literatur berkaitan model penilaian massa yang digunakan dalam penilaian kadaran

MASS APPRAISAL IN PROPERTY TAXATIONWan Norhishamuddin Wan Rodi

MSc. Real Estate Student, Faculty of Geoinformation, Science And Engineering

University of Technology, Malaysia (UTM)Skudai, Johor.

1.0 INTRODUCTION

Real estate consists of numerous branches of sector and area. Included in such area are the valuation, property management, real estate agencies, corporate real estate management and so forth. Specifically, in valuation practice, valuers applied different types of valuation tools in estimating the market value or price of certain real estate. These methods are identified as comparison method, cost method, investment method, profit or account method and last but not least the residual approach. Some of these methods may become obsolete from time to time due to the fast technological advancement attained in the modern days. Valuation is needed in a variety of statutory valuation exercises. In Malaysia for instance, some scopes of statutory valuation consist of local authority assessment (Rating), Stamp Duty, Real Property Gains Tax (currently exempted) and land acquisition. Each of these scopes has its’ own regulation and act whereby valuation principle should be based on these as a guideline. However, in this write-up, the valuation exercise for the purpose of rating and assessment is going to be taken into account.

Respectively, the level of rates currently is set by the Local Government and the law governing the rating assessment and procedure must be in accordance to the specific act and regulation pertaining to rating. The revenue collected from rates is allocated for the spending of Local Authorities. Rating is basically a local taxation imposed on property whereby the purpose is to finance the local government in terms of providing services to public people. In Malaysia, the assessment rates are imposed according to the provision stipulated under the Local Government Act 1976. Within this provision, the Local Authority has the power to collect assessment rates according to the area of jurisdiction. The purpose of valuation and appraisal conducted is to determine the amount of levy on that property (Ahmad Ariffian& Hasmah, 1998). As a result from the process of taxation, it is called the assessment rates. There are a few methods of valuation apply in order to determine the Improved Value or Market value of a particular property in this circumstance. Traditionally, the rating valuation utilizes a few approaches where it involves valuing the subject property one by one. Where the number of properties in certain district or jurisdiction of local authority expanded from time to time, single valuation seems to be irrelevant due to several factors or drawbacks. Imperatively, there is a requirement to propose a new method of valuation where it addresses the limitation of single property valuation. As a result, Mass Appraisal technique is employed to rectify the flaws occurred in single valuation whereas it is founded from statistical technique to appraise the value of assessment systematically at a bigger and extensive scope or level (IAAO, 2003). In addition, Mass Appraisal is manipulated to test two of the objectives in property assessment procedures including the “equity principle” and “fair market value” (Donnelly,

1989). To expand further, it is basically a systematic appraisal of groups of properties at specified date using standardized procedures and statistical testing (Kauko & d’Amato, 2008; Ibrahim, 2009; IAAO [1990, chapter 5] and Gloudemans [1999, chapter 5]) cited in IAAO, 2008). From the definition provided it can be inferred that it is an advanced technique of appraisal whereas involving the statistical approach and testing. Ibrahim (2009) also highlights about two purposes of mass appraisal, which is to provide equitable and efficient appraisal of subjected property located in a jurisdiction of local authority for ad-valorem duty. The principles of equity and efficient appraisal are very imperative to be achieved in property taxation and appraisal. Within the mass appraisal, statistical approaches are manipulated to produce the accuracy and consistency in valuation. This write-up will discussed and ventured further into the Weaknesses of Single Property Valuation, the Benefits of Mass Appraisal Technique, and finally Mass Appraisal Model in Property Taxation.

2.0 DRAWBACKS OF SINGLE PROPERTY APPRAISAL

Single property appraisal seems to provide a few drawbacks inside the property taxation context. Evidently from Mcluskey & Anand (1999) where they established a standpoint on the drawbacks of single property appraisal;-

‘Working in an environment of cost constraints, limited resources, and reflecting the scale of having to value hundreds of thousands if not millions of properties as of a given date, have important implications for government valuation departments with responsibility for property tax assessment’. (Mcluskey & Anand, 1999, pp234)

The above statement specifies in general where it will acts as a foundation to identify the weaknesses of Single Property Appraisal. It seems to attract a few drawbacks that will influenced the overall context of property taxation. Based on the literature, reviewed from a few influential real estate researchers, there are about a few flaws that can be identified including; 1) possibility of systematic valuation error, 2) inflexibility in terms of time and cost constraint, 3) Many valuation information may be discarded in single property valuation, and lastly, 4) Utilization of small number comparables may poses theoretical and empirical questions.

1) Possibility of Systematic Valuation Error

It is observable that the traditional approach of single property appraisal may lead to the systematic valuation error. As such, single property appraisal largely depends on the subjective judgment of the appraiser or valuer rather than strong and reliable basis of estimation. This may as well create erroneous valuation estimation and biased valuation exercise. (Donnelly, 1989) Highlights the drawbacks of single valuation where it resulting the appraisal exercises carried out become biases from the work of individual that select the comparable properties directly from a small number of properties. It has been examined that;-

‘Among the problems encountered in such efforts are the subjectivity inherent in evaluating the individual physical attributes of the dwelling unit and the difficulty of estimating a weighting scheme for combining the attribute measures into a single index’. (Sumka, 1977, pp298 and 308) as cited in Donnelly (1989).

The statement above indicates the predicament of subjectivity where it will creates a systematic valuation error when utilizing the traditional approach. Within the single property appraisal, individual physical attributes are largely prejudiced due to the difficulty in creating a measurement scheme to formulate all the attributes inside the property assessment. For instance, a valuer may employ a wrong judgment when valuing a property for taxation purpose due to the lack of experience or relevant knowledge pertaining to the market and valuation methodology. This might as well producing incorrect rateable value for that particular property. By far, it requires a highly qualified valuation professional to provide these objective assessments of value.

The weakness of the method of valuation may itself leads to the systematic error in appraisal. In cost method, there is a possibility of double counting where it is related to the “misleading notion of composition” where total is simply from the sum of all parts (Donnelly, 1989). Donnelly (1989) further gives an example of fourth and fifth bedrooms in a house with single bathroom are not as the same value with two or more bathrooms inside the other house. Lessinger (1969) cited in Donnelly (1989) was obviously objected the grocery checker approach in real estate appraisal as the real property component are not divisible. The value of each component relies on the others which are there. Lessinger (1969) perspective suggest the real estate component is not always the same; dependant on the other elements where it combined together.

2) Inflexibility; Time and Cost Constraint

Valuation for the purpose of taxation in the context of local government involves a massive and large quantity of properties inside their jurisdiction. The property can be divided into various types including residential, commercial, and industrial property. It could be further segregated into a different sub-type including the terrace, detached, semi detached, bungalow, and others. Judging from this scenario, single property appraisal may become inflexible due to the vast number of properties that will need to value and appraise. Portnov et.al (2001) observes;-

“The logistics of providing accurate and defensible assessments of value on a frequent revaluation cycle is an extremely demanding and often impossible task”. (Portnov et.al, 2001, pp352).

It is uneconomic and time consuming if a traditional method of valuing one by one property is adopted. Ultimately, single property valuation is subjected to the restriction

in time and cost. It will take a vast number of workers and high cost of capital to value all the properties within the stipulated time.

3) Many Valuable Information will be Discarded in Single Property Valuation.

Using the traditional method, many information gather by the appraiser may have to be discarded in most cases. This is mostly because, the use of traditional method does not permit the use of additional information obtain from the property(Donnelly, 1989).

Sumka (1977) further explains that one cannot simply ignore the abundant evidence within the tax appraisals. For instance, the traditional method does not address in detail the element of locality and neighborhood when conducting the estimation of market value. In reality, this element should not be taken lightly as it will influence the property value itself. Some properties may locate in a different area or district. The elements encompassing the property value such as neighborhood factor that varies from one district to another requires the valuers to pay attention on these additional information. Without consideration of other elements or information in the traditional approach, the principles of equity and fair market value are hard to accomplish.

4) Utilization of Small Number Comparables May Poses Theoretical and Empirical Questions.

The above statement is true based on the perspective of Donnelly (1989). Donnelly (1989) emphasized the lackness of comparable properties used in property taxation exercises may raises the theoretical and empirical question. It is hard actually to find a set of comparables having a similar characteristics.

In this scenario, the appraiser usually utilized a small number of comparables in their valuation and further applied it to similar property (under his subjective judgment) to achieve standardization. However, there is a theoretical and empirical questions that might occur when employing such technique. Is it fair to give a same assessment when, one property is located, e.g: within the Johor Bahru city centre(urban) and another one situated in Tampoi (suburban) where the level of local authority services differs from each other? This situation may not fulfill the criteria of “equity” and fair assessment.

3.0 SUPERIORITY OF MASS APPRAISAL

Previously, this piece of paper has underlined the drawbacks and disadvantages of single property appraisal. These drawbacks have attracted and ignite the interest of real estate researchers to come up with an alternative method to rectify the drawbacks exist. Mass Appraisal tends to provide a solutions and very beneficial when conducting assessment exercises. In general, based on (Mcluskey & Anand,1999) standpoint;-

“The advantages of mass appraisal and in particular computer assisted mass appraisal are well documented, but generally they relate to aspects of greater objectivity, the provision of regular or annual revaluations, improvements in equity, fairness and economies of scale”. (Mcluskey & Anand, 1999, pp221)

Judging from this, the statement above will be formulated into a framework when identifying the benefits of mass appraisal. According to literature review conducted from various research papers, there are several benefits and superiority of Mass Appraisal as to compare with Single Property Appraisal. It can be divided into; 1) Provide accuracy and consistency, 2) More Valuable information can be considered within the Mass Appraisal model, 3) Increase efficiency and technical capabilities of the valuer’s office, 4) improvements in equity, fairness.

1) Provide Accuracy and Consistency

Mass appraisal provides a precise and consistent result that can be used continuously and tested to produce a reliable appraisal model. Ibrahim (2009) objectively stated the mass appraisal as a tool and approach that able to fabricate an accurate and equitable valuation. The perspective further supported by Donnelly (1989) where he observes;-

“The application of regression analysis to the attribute data would assure consistency and could facilitate an analysis of the relationship of assessment values to selling prices of the property…..”( Donnelly, 1989, pp11)

The used of statistical approach and computerized system reduced the substantial reliance on valuation officer’s subjective judgment and experience that might leads to systematic errors. Using an extensive statistical procedures with high degree of precaution to model and test the result, any errors and misguided elements might be minimized. The application of modern technology such as computer program e.g; Computer Mass Appraisal Systems (CAMA) made it possible to produce a consistent result applied in the local authority assessment.

2) Large Data handling within the Mass Appraisal

One of the superiority of mass appraisal is in regards to the number of information that could be formulated inside the appraisal for taxation (Donnelly, 1989). The use of more advance and highly reliable computer make it possible for the valuers to conduct the assessment using large scale and extensive data. Within this scope, Mcluskey & Anand (2008) assert;-

“Within the field of mass appraisal, there is a unique situation of having to ‘mass’ value several hundred thousand properties utilizing a database which could contain many thousands of transactions”. (Mcluskey & Anand, 1999, pp218)

Based on this perspective, it demonstrates the mass appraisal able to handle a hundred thousand of properties and establishing a database encompassing a thousand transactions. Single property appraisal normally disregards many information that would become imperative in determining the assessment value. As a result, the mass appraisal technique is the best approach that capable of handling large data set to allow fuller usage of the information (Donnelly, 1989). Due to large data handling, Mass Appraisal is also able to replicating the forces of supply and demand over a bigger and wider area and the appraisal judgment would expanded into a group of properties rather than single properties (Ibrahim, 2009).

3) Increase efficiency and technical capabilities of the valuer’s office

The statement above agreed by Ibrahim (2009). Mass Appraisal provides a substantial benefits towards increasing the efficiency and technical capabilities of the valuer’s office. By using the Mass Appraisal when assessing a large number of properties that covers a broad jurisdiction, it will reduced the total number of profesional valuers needed to cover that area and subsequently reduce the cost such as transportation and other operating expenses. The labor force can be allocated at the other crucial tasks in the process of property taxation. Additionally, the results produced are quicker than the single property appraisal as the assessment subjected to a cluster of properties, not single property (Ibrahim, 2009). Mass appraisal also enhancing the technical capabilities of the valuer’s office through the usage of highly sophisticated and faster computer programme in the taxation exercises.

4) Improvement in the equity and Fairness

The utilization of large number comparables manage to generate a result that cater the ’equity’ and ‘fair market value’ principles (Donnelly, 1989). In single property appraisal, the comparable properties adopted in the assessment process are in a small number usually four properties according to Donnelly (1989). Judging from this situation, the assessment posed an issue of equity and fair market value because the assessment do not reflect the overall population of properties within the jurisdiction. Mass appraisal on the other hand, utilized a large number of properties as comparable and used it to produce a result that would reflect the overall market or population. As a result, the intended goals of property taxation; equity and fairness possibly will be achieved using the Mass Appraisal technique.

Mass Appraisal Techniques; Strengths and Weaknesses

Previous study conducted by a few researchers cited in Mcluskey & Anand (1999) highlighted the strengths and weaknesses of a few mass appraisal techniques being employed in the property taxation. This will provide some understanding on the subject matter. Refer to Table 1.0;-

Table 1.0: Analysis of Mass Appraisal TechniqueSource; Mcluskey & Anand (1999)

4.0 MASS APPRAISAL MODEL

AN OVERVIEW OF MODELS IN MASS APPRAISAL

Earlier, this review has identified the weaknesses of single property appraisal and further stressing out the superiority of Mass Appraisal over single appraisal. The explanations provided hopefully will give some understanding to the reader vis-à-vis the reason for the application of Mass Appraisal approach in property taxation. Subsequently, there is an important aspect that should be emphasized when conducting a literature review on Mass Appraisal whereas in regards to the Mass Appraisal Model existed and manipulated by researchers and property experts. In general, Mass appraisal models attempt to represent the market for a specific type of property in a specified area. There are a few steps transpire when selecting Mass Appraisal technique as an appraisal tools. It is apparent in IAAO (2008);-

“Mass appraisers must first specify the model, that is, identify the variables (supply and demand factors) that influence value, for example, square feet of living area. Then, mass appraisers must calibrate the model, that is, determine the adjustments or coefficients that best represent the value contribution of the variables chosen, for example, the dollar amount the market places on each square foot of living area”. (IAAO, 2008, pp8)

Based on the regulation and guideline above, there are about a few processes identifiable in Mass Appraisal exercises. However, there is a requirement to provide a meticulous and extensive market analysis for both specification and calibration of a model that estimates values accurately. In regards to the statistical procedures, the Guidance Note n. 13 of IVS (I.V.S.C., 2005) 1.7 asserts that ‘The development of Mass Appraisal Systems for property taxation should follow recognized scientific standards in statistical applications. . .’. This guidance gives details on important aspect of modeling technique in property taxation where it should adhered to a known scientific standards without prejudicing the correct statistical applications.

Models that have been used in Mass Appraisal are numerous and relatively new techniques grow tremendously in line with the technological advancement. General models as highlighted by Ibrahim (2009) identified three types; Additive, Multiplicative and Hybrid. Successfully, the writer was able to identify more models that have been used by studying the literatures. Some of the models or techniques being used (Kauko & d’Amato, 2008) in one of the most influential Mass Appraisal paper;-

1) Orthodox Approaches to Mass Appraisal; MRA- model driven hedonic and data driven statistical approach, MRA combines with advance spatial techniques i.e Kriging.

2) Flexible (i.e., model free) regression method ;Generalized Additive Model (GAM) by Mason & Quigley (1996), Colwell & Munneke (2003) proposed ‘piecewise parabolic multiple regression analysis’ (PPMRA), Geographically weighted regression (GWR, Fotheringham) by Páez and colleagues (2002).

3) Heresy / other technique beside MRA; (Artificial) neural networks (ANN), The genetic algorithm.

4) Qualitative technique of computerized data processing; Rule-based expert system, Case-based reasoning, Fuzzy logic, Rough set theory (RST).

5) Methods based on interviews and surveys; contingent valuation method (CV), The multi-attribute value tree (MAVT).

Moreover, the models that exist in the Mass Appraisal are theoretically grouped into five areas as articulated by Kauko & d’Amato (2008);-

Strict quantitative method based on parametric hedonic regression (or more generally, economic equilibrium) models – either with or without an explicitly spatial extension.

Flexible (non-/semi-parametric) quantitative methods; these are still formally accommodated within mainstream economic modelling.

Flexible quantitative method based on machine learning; these are ‘intelligent’ (i.e., machine learning) methods from the computer science discipline.

Rule-based expert systems of valuation, using either transaction price or expert interviews data; may be based on machine learning.

Methods, where interviews and surveys such as multi-criteria decision methods replace market data calculation; usually both quantitative in the sense that they are mathematical, and qualitative in the sense that they use judgmental data. These stated choice/preferences methods serve a purpose in certain well- specified problem settings.

4.1 MASS APPRAISAL MODEL SUBJECTED TO THIS STUDY

INTRODUCTION

Discoveries made when reviewing the various models in Mass Appraisal provide a brief and concise perspective to general reader. To address these models one by one would requires a substantial efforts and in-depth knowledge. Nevertheless, the time frame limitation resulted the writer to opt for only one Mass Appraisal Model as a study case. To instigate with, the framework for selecting the model is ultimately supported by the three models of Mass Appraisal; Additive, Multiplicative and Hybrid (Ibrahim, 2009). Hybrid Model is selected as a subject study due to the fact that it possesses certain advantages as to against other model, i.e. they may offer a suitable solution to the valuation of land for site value purposes in situations where the number of sales is low, generally called a "thin market" (Rossini & Kershaw, 2006). Additionally, Rossini & Kershaw (2006) have declared that this model may produces superior results to simpler AVM's and may be particularly useful in a situations where improved properties need to be used to estimate site value.

HYBRID MODEL

As far as concern, there are a few research paper outlining the definition, model specification, and the usage of Hybrid Model. Before venturing further into these aspects, it is imperative to understand the meaning of AVM. The IAAO standards define an automated valuation model (AVM) as;-

"… a mathematically based computer software program that produces an estimate of market value based on market analysis of location, market conditions, and real estate characteristics from information that was previously and separately collected. The distinguishing feature of an AVM is that it is a market appraisal produced through mathematical modelling. Credibility of an AVM is dependent on the data used and the skills of the modeller producing the AVM" (IAAO, 2003 pp148) cited in Rossini & Kershaw (2006).

The AVM can be segregated further as Additive, Multiplicative and Hybrid. In Section 3 of the Standard Valuation Model, it emphasizes that ‘Hybrid (nonlinear) models are a combination of additive and multiplicative models’. Goontilake & Khebbal (1995) cited in (Mcluskey & Anand,1999) attempted to provide detail justification on hybrid system where they defined it as a system where two or more techniques are combined in a manner that overcomes the limitation of individual techniques. Hybrid Model also known as Nonlinear model are seldom used due to limited software availability, but these models more accurately reflect the combination of additive and multiplicative relationships in the real estate market (IAAO, AVM Standard, 2003). Within the scope of Hybrid, Goontilake & Khebbal (1995) cited in (Mcluskey & Anand, 1999) classify the hybrid systems into three forms; 1)Function Replacing System, 2) Inter Communicating Systems and, 3) Polymorphic Systems.

HYBRID MODEL SPECIFICATION

In Mass Appraisal, the hybrid model specification takes into the form of non-linear regression as specified in IAAO (1990); Gloudemans (1999) cited in (O'Connor, 2002) and thus permit the development of non linear computer programme. “The hybrid model specification is: -

MV = π GQ * [(π BQ * Σ BA) + (π LQ * Σ LA) + Σ OA]

Where;-

MV is the estimate market value π GQ is the product of general qualitative variables π BQ is the product of building qualitative variables Σ BA is the sum of building additive variables π LQ is the product of land qualitative variables Σ LA is the sum of land additive variablesΣ OA is the sum of other additive variables.

Example of Hybrid Specification, produced by McCain, Jensen et al. (2003) cited in Rossini & Kershaw (2006) where they used some 40,000 arm’s length transactions to develop a two stage hybrid model. The neighbourhood variable was then combined with land area, liveable area and building condition in a non-linear regression.

As a result, McCain, Jensen et al. (2003) Hybrid Model is specified as follow;-

4.2 PREVIOUS RESEARCH APPLYING HYBRID MODEL

The writer managed to analyze a few research papers formulating the hybrid model in their analysis. One of the prominent researchers in Mass Appraisal, McCain, Jensen et al. (2003) cited in Rossini & Kershaw (2006) where their study involved developing a two-stage hybrid model. The first stage concerned on estimating a neighbourhood index for each property which was then used as input to a hybrid regression model. The neighbourhood index was estimated from the residuals of a simple hedonic model (using building and site characteristics) and then used a Kriging process to smooth out the variation. This neighbourhood variable was then combined with land area, liveable area and building condition in a non-linear regression. As affirmed by Rossini & Kershaw (2006), ‘this model proved to be effective even with a small set of descriptive variables’.

Another research paper by Rossini & Kershaw (2006) has established a Hybrid Automation Valuation Model in their analysis whereby the study was aimed to investigate the usefulness of hybrid AVM’s to estimate both capital and site values and establish if such a model could outperform more conventional methods of assessment. The result from the analysis recommend the hybrid model as a functional and reliable due to better predictive accuracy than more simple models for capital values. Additionally, Hybrid model was far more better when assessing the site value and actual assessed value conducted by valuers in this research paper.

Mcluskey & Anand (1999) on the other hand, endeavored the intelligent hybrid model within the application of property taxation. Their study focusing on investigating the reliability of hybrid artificial intelligent system developed and applied to the mass appraisal of residential property. In detail, the research paper concentrating towards investigating the hybrid structures using artificial neural networks with genetic algorithms. Mcluskey & Anand (1999) adopted four-stage process; 1) data mining, 2) calculate weights for each variable, 3) employing nearest neighbor algorithm with derived weights, 4) used comparable to predict the value of subject property.

4.3 CRITIQUES TOWARDS THE HYBRID MODEL

Hybrid model seems to serve a quite substantial benefits and advantages as to compare with other modeling techniques in Mass Appraisal. This Model is able to address the weaknesses of individual Model such as the shortcomings in terms of performance, reliability or missing functionality through using another technique or combination of techniques (Mcluskey &Anand, 1999). Beside the previously mentioned benefit of higher predictive capability, it is theoretically more acceptable to some analysts and better for assessing the value ‘component’ which are normally used when revising valuations after minor renovations (Rossini & Kershaw,2006). Next, it is a useful model as it incorporate a broad range of market transaction when assessing site values and the most suitably applied when legislation or legal precedent requires valuers to consider the use of improved properties when assessing site values.

Also, Rossini & Kershaw (2006) viewed the hybrid model, as a model that can be used to estimate both capital and site values with good accuracy and is particularly useful for estimating site values in situations where there is a scarcity of vacant land transactions. Mcluskey & Anand (1999) stressed about three benefits of hybrid model as; 1) using a combining techniques, the model can be build on the particular strengths of each paradigm, 2) due the weaknesses in model explainability of neural networks and genetic algorithms, hybrid model provides the ability to objectively select and retrieve comparables based on an integrated neighbor algorithm where it leads to a development of a solid foundation and transparent mass appraisal system, 3) avoid complete reliance towards subjective knowledge to determine the property attributes through information inherent within the data.

As observed before, there are a lot of advantages and superiority of Hybrid Model as to compare with other model. However, the lack of statistical programme and analysis pretty much becomes an hindrance to the development of advance hybrid model in property taxation.

5.0 CONCLUSION

This review intended to embarks on a brief an concise analysis towards Mass Appraisal particularly on the topics such as the weaknesses in single property appraisal, superiority of mass appraisal and modeling technique in Mass Appraisal. In general, this study able to discover the weaknesses of single property appraisal whereas it consists of possibility of systematic valuation error, inflexibility in terms of time and cost constraint, Many valuation information may be discarded in single property valuation, and lastly, utilization of small number comparables may poses theoretical and empirical questions. These findings further leads to the rationale of Mass Appraisal introduction in property taxation.

Mass Appraisal is by far the most superior than Single Property Appraisal judging from the benefits it serves to property taxation field. The benefits such as providing accuracy and consistency, more valuable information can be considered within the mass appraisal model, increase efficiency and technical capabilities of the valuer’s office, and improvements in equity, fairness makes it more preferable in most of the Local Authority in all part of the world including in Malaysia.

In respect to the Models in Mass Appraisal, the findings really satisfied the writer’s hunger for a knowledge in this particular area. The explanation was made on a brief context but substantially extensive in term of opening up the research possibilities in the near futures. The potentiality of Mass Appraisal Model is quite promising i.e. one of the models, Hybrid appears to provide an imminent potential that has yet to be explored in Malaysia property taxation. In Malaysia’s context, even the application of Mass Appraisal is still at the introductory and initial level as to compare with the US and European counterpart. However, like some saying, ‘better late than never’.

The beginning of Mass Appraisal in Malaysia eventually reflecting an excellent gesture towards achieving an efficient, equitable and fair property taxation so as to rectify the long and unsettled issues raised currently on local authority unfair and inequitable assessment within their jurisdiction scattered across nation. To wrap up this study, the writer cited the statement by (Mcluskey & Anand, 1999), where they highlighted some points to ponder on Mass Appraisal. The application of computer assisted mass appraisal systems is becoming more imperative than ever, subsequently needed further research into the development of more robust techniques. This is true as to assist in achieving a more cost-effective approach, at the same time maintaining the accuracy standards.

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