In order to build the models, it is necessary to demarcate the market area to be explored, define the variables to be included in the model, obtain a reliable and good-sized data sample and treat data through statistical analyses ( Appraisal Institute 2001). This type of pricing model can be used, for example, in tax valuations, which aim at calculating property taxes, sales taxes and capital gain taxes.

The objective of the study if to present hedonic pricing models for the housing market in Lajeado and Montenegro, two mid-size cities located in the south of Brazil. Keywords: real estate valuation market value hedonic pricing models It can be concluded that the models developed are useful in tax valuations. Significance tests for the variables and the model were carried out, and they showed that models have a good explanatory power regarding the prices. The statistical analysis allowed obtaining the equations that best fitted the collected data.

The data was collected from real estate agencies and commercial assessment reports. This paper studies two mid-size Brazilian cities, Lajeado and Montenegro, demonstrating the process of analysis and developing real estate pricing models. This matter represents a barrier for the widespread use of statistical inference in tax valuation, especially in small and mid-size cities, which have less resources. In the case of taxes, models must be broad, aiming at the valuation of a group of properties, which makes the work seem more complex.

Pricing models serve different purposes, such as calculating real estate taxes or analyzing real estate financing. This work presents a study on real estate pricing using hedonic 3 pricing models.

Hedonic pricing