Why it matters in Registering Property - Doing Business

This topic examined the steps, time, and cost involved in registering a property, assuming a standardized case of an entrepreneur who wanted to purchase land and a building that was already registered and free of title dispute. In addition, the topic measured the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology and video for more information.

Why it matters?

Why does property registration matter?

Registered property rights are necessary to support investment, productivity, and growth. (1). Cadasters or surveys, together with land registries, are tools used around the world to map, prove, and secure property and use rights. These institutions are part of the land information system of an economy. As land and buildings account for between half and three-quarters of the wealth in most economies, (2) having an up-to-date land information system is vital.

Owners with properly registered titles are more likely to invest in the local economy. Rising land values and more efficient land use are often observed in economies with effective property registration systems. In Nicaragua, having a formal title not only made owners more likely to invest but increased land values by 30%.(3) Property values in Thailand rose by 75–197% following a land titling project that expanded property registration (4). As part of a national experiment in 2008, China’s Chengdu prefecture implemented a series of ambitious property rights reforms, including universal land registration, measures to ease property transfers and the elimination of migration restrictions. These reforms significantly reduced the threat of land reallocation or expropriation, thereby facilitating more efficient land use, whether through investment or by transferring land from less to more productive uses and users. As a result, a greater share of land—whether for agriculture or construction—was used for economic purposes.(5)

Owners with properly registered titles are more likely to engage the economy’s workforce and boost productivity. This is because formal property markets encourage employment by increasing domestic stability and decreasing the likelihood of evictions in poor, urban areas. Between 1996 and 2003, the Peruvian government issued a series of legal, administrative and regulatory reforms aimed at promoting a formal property market in urban squatter settlements in eight cities. Pre-program squatters in program neighborhoods were 60 percent more likely to report improved tenure security. As a result, the median squatter was able to work 12 hours per week.(6)

The benefits of land registration extend beyond the private sector. For governments, having reliable, up-to-date information in cadasters and land registries is essential to assess and collect taxes correctly. In Thailand, annual revenue from property and transfer taxes rose from $200 million in the 1980s to $1.2 billion by 1995. A land titling program that increased the number of registered property owners during the 1980s is credited as being one of the drivers of this revenue boost (7).

With up-to-date land information, governments can better map the needs of their citizens, facilitating the efficient provision of services and infrastructure (8). Land information can also help in planning the expansion of urban areas; this is particularly important in economies prone to natural disasters. Where economies lack urban planning, informal dwellings and slums abound—even in areas identified by surveyors as being at high risk from natural disasters. Tools such as cadasters and survey maps can be used in city planning to avoid or mitigate the effects of environmental or climate-related risks to urban populations.

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1. Deininger, Klaus. 2003. “Land Policies for Growth and Poverty Reduction.” World Bank Policy Research Report, World Bank, Washington, DC.
2. World Bank. 1989. World Development Report 1989. New York: Oxford University Press.
3. Deininger, Klaus, and Juan Sebastian Chamorro. 2002. “Investment and Equity Effects of Land Regularization: The Case of Nicaragua.” World Bank, Washington, DC.
4. Burns, Anthony. 2002. “Land Registration to Improve Security, Transparency, Governance and Sustainable Resource Management.” In “Comparative Study of Land Administration Systems,” World Bank Asia Regional Workshop on Land Policy and Administration Working Paper, World Bank, Washington, DC.
5. Deininger, Klaus W., Songqing Jin, Shouying Liu, Ting Shao and Fang Xia. 2015. “Impact of Property Rights Reform to Support China's Rural-Urban Integration: Village-level Evidence from the Chengdu National Experiment.” Policy Research Working Paper WPS 7389, World Bank, Washington, DC.
6. Field, E. 2007. “Entitled to Work: Urban Property Rights and Labor Supply in Peru.” The Quarterly Journal of Economics 122 (4): 1561-1602.
7. Burns, Anthony. 2002. “Land Registration to Improve Security, Transparency, Governance, and Sustainable Resource Management.” In “Comparative Study of Land Administration Systems,” World Bank Asia Regional Workshop on Land Policy and Administration Working Paper, World Bank, Washington, DC.
8. Property information held in cadasters and land registries is part of the land information available to governments. Land information also includes other geographic, environmental and socioeconomic data related to land which are useful for urban planning and development.