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Land Management and Taxation Practices Capacity Building and Improving Environment for Municipal Practice in Land Management and Taxation NALAS Task Force on Urban Planning CAPACITY BUILDING AND IMPROVING ENVIRONMENT FOR MUNICIPAL PRACTICE IN LAND MANAGEMENT AND TAXATION NALAS Task Force on Urban Planning Report November 2015 Capacity Building and Improving Environment for Municipal Practice in Land Management and Taxation CONTENTS This Report is a collaborative effort of the NALAS Task Force on Urban Planning (TF UP) 1. Introduction .......................................................................................................................................................... 5 Izidor Jerala, Association of Municipalities and Towns of Slovenia (Host of the Task Force on Urban Planning) 2. Introduction: The relationship between property taxation and urban development ................................ 6 Indrit Gradeci, Albanian Association of Communes 2.1. Stages of land development ............................................................................................................................................................. 6 Azra Agic, Association of Municipalities and Cities of the Federation of Bosnia and Herzegovina Andjelina Osap, Association of Towns and Municipalities of Republic of Srpska, Bosnia and Herzegovina 2.2. Types of taxation on land use .......................................................................................................................................................... 7 Siya Shehtanova, National Association of Municipalities of the Republic of Bulgaria 2.3. Experts discussions .............................................................................................................................................................................. 8 Glorija Bolterstein, Association of Municipalities of the Republic of Croatia 3. Urban development challenges .......................................................................................................................... 9 Liburn Aliu, Association of Kosovo Municipalities Vesna Jurak, Association of the Units of Local Self-government of Republic of Macedonia 4. Workshop results: The potential of taxes on land to support urban development policy goals ..............11 Viorel Rusu, Congress of Local Authorities from Moldova 4.1. Financing infrastructure.................................................................................................................................................................... 11 Tatjana Jelic, Union of Municipalities of Montenegro 4.2. Getting vacant land/buildings in use .........................................................................................................................................12 Claudia Pamfil, Association of Communes of Romania Klara Danilovic, Standing Conference of Towns and Municipalities, Serbia 4.3. Reducing urban sprawl .....................................................................................................................................................................13 Ulas Akin, Marmara Municipalities Union, Turkey 4.4. Increasing energy efficiency in buildings..................................................................................................................................13 Ezgi Küçük, Marmara Municipalities Union, Turkey 4.5. Stimulating local economic development ...............................................................................................................................14 4.6. Maintaining the existing housing stock .....................................................................................................................................14 International Expert: Erich Dallhammer, Content Advisor, ÖIR GmbH 4.7. Distributing the financing of urban infrastructure fairly between users from cities and from surrounding municipalities ...................................................................................................................................................14 Publication and Production Coordinator: 4.8. Avoiding gentrification .....................................................................................................................................................................14 Milena Garthley, NALAS Programme Officer for Urban Planning 4.9. Reducing illegal construction ........................................................................................................................................................14 With the support of: 5. Data requirements (for property tax) .............................................................................................................. 15 NALAS Task Force on Fiscal Decentralisation 6. Conclusions ......................................................................................................................................................... 16 NALAS Knowledge Management Assistants 6.1. Financial tools to support urban development ......................................................................................................................16 6.2. Final conclusions .................................................................................................................................................................................16 2 3 Capacity Building and Improving Environment for Municipal Practice in Land Management and Taxation TABLES AND FIGURES 1. INTRODUCTION Table 1: Urban development challenges and related urban development policy goals ......................................................10 Table 2: Identified potentials of different forms of taxation to support urban development policy goals ...................10 NALAS Task force on Urban Planning organised Personal views on land taxation and urban devel- Figure 1: The relation between the price of a plot of land and its development .......................................................................6 the workshop “Capacity building and improving opment shall inspire the workshop. (it is best if environment for municipal practice in land management the personal opinions reflect the view of the local Figure 2: Opinion of NALAS experts: What is the aim of property tax? ..........................................................................................8 and taxation” in Belgrade, 5th – 6th October 2015. It government association to the best knowledge of Figure 3: Systemic picture describing the relationship between urban development challenges contributed to support arguments on municipal urban the experts though personal expert opinion will be and taxation on land ........................................................................................................................................................................9 planning and land management focusing on the relation appreciated) between land development and taxation of land and Figure 4: Infrastructure fee and infrastructure maintenance fee ....................................................................................................13 real estate. The following report documents the results The answers were used as input for the workshop to Figure 5: Expert opinion: “On which stage of development of land should property tax be applied?” ........................15 of the Task Force on Urban Planning endeavour, and steer the discussions. The answers are documented in a also of wider discussions held on the topic in South separate document. Eastern Europe, in particular the NALAS Summer School on Local Governance and Intergovernmental Fiscal The workshop is funded by the Austrian Development Relations and with the involvement of Task Force on Agency (ADA) through the BACID grant scheme Fiscal Decentralisation. (Building Administrative Capacities in Danube Region & Western Balkans), managed by the Austrian Association In advance of the workshop, a survey was conducted of Cities and Towns (AACT) and KDZ Center for Public to collect relevant information about the practice of Administration Research. property taxes and its connection to land use planning in order to enable a structured exchange of information. This document has been produced with the assistance of Two types of questions were raised: the Austrian Development Agency (ADA). The contents of this document are the sole responsibility of the Questions concerning property tax and urban de- author/s and can in no way be taken to reflect the views velopment are developed to get more insight infor- of ADA nor the Austrian Government. mation about the status quo in NALAS operational region – South Eastern Europe. 4 5 Capacity Building and Improving Environment for Municipal Practice in Land Management and Taxation 2. INTRODUCTION: THE RELATIONSHIP BETWEEN PROPERTY 2.2 Types of taxation on land use The core hypothesis during the discussions is that Land transfer tax TAXATION AND URBAN DEVELOPMENT taxation on land property can be used as a land management tool: coordinating the taxation of land When discussing the relationship between land land. In this case this administrative/legislative mea- property with land management can contribute to The land transfer tax has to be paid once when prop- management and taxation, two dimensions have to sure increases the usability of the plot of land and develop the cities and regions more efficient and more erty is sold. It is calculated as a share of the price in %. be taken into account: the different stages of land consequently raises the price. sustainable. Usually
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