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A Global Compendium and Meta-Analysis of Property Tax Systems

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A Global Compendium and Meta-Analysis of Property Tax Systems A Global Compendium and Meta-Analysis of Property Tax Systems Richard Almy © 2013 Lincoln Institute of Land Policy Lincoln Institute of Land Policy Working Paper The findings and conclusions of this Working Paper reflect the views of the author(s) and have not been subject to a detailed review by the staff of the Lincoln Institute of Land Policy. Contact the Lincoln Institute with questions or requests for permission to reprint this paper. [email protected] Lincoln Institute Product Code: WP14RA1 Abstract This report is a global compendium of significant features of systems for recurrently taxing land and buildings. It is based on works in English, many of which were published by the Lincoln Institute of Land Policy. Its aim is to provide researchers and practitioners with useful infor- mation about these sources and with facts and patterns of system features, revenue statistics, and other data. It reports on systems in 187 countries (twenty-nine countries do not have such taxes; the situation in four countries is unclear). Accompanying the report are an Excel workbook and copies of the works cited when available in digital form. Keywords: Tax on property, recurrent tax on immovable property, property tax, real estate tax, real property tax, land tax, building tax, rates. About the Author Richard Almy is a partner in Almy, Gloudemans, Jacobs & Denne, a US-based consulting firm that works exclusively in property tax administration, chiefly for governments and related insti- tutions. Mr. Almy began his career as an appraiser with the Detroit, Michigan, Board of Asses- sors. Later he served as research director and executive director of the International Association of Assessing Officers (IAAO). He is a coauthor of several IAAO publications, including Funda- mentals of Mass Appraisal (2011) and Fundamentals of Tax Policy (2008). His consulting work spans more than 100 projects in twenty-three countries in North America and the Caribbean, Europe, Africa, and Asia. Compiling information on property tax systems is something of a hobby. Mr. Almy has a Master’s in Urban Planning from Wayne State University in Detroit, Michigan, and a Bachelor’s Degree in Art History from the University of Michigan. Richard Almy 6230 South Peck Avenue La Grange Illinois 60525 Telephone: 708-354-8265 Facsimile: 708-354-1984 [email protected] richard.almy@gmailcom Acknowledgements I am indebted to Mary Odom, IAAO Director of Library Services, for her help in identifying potential sources and in assembling reference materials. This paper could not have been pro- duced without the guidance and support of the Lincoln Institute of Land Policy, and I especially want to thank Sally Powers, Jane Malme, and Joan Youngman. Much of the material on Europe draws from a paper, “Property Tax Regimes in Europe,” which I prepared for UN-HABITAT. Its publication is forthcoming. Corrections and updates would be welcome. Table of Contents Introduction ..................................................................................................................................... 1 Overview ......................................................................................................................................... 3 Africa ........................................................................................................................................ 4 Asia ......................................................................................................................................... 13 Australia and Oceania ............................................................................................................. 18 North America and the Caribbean .......................................................................................... 27 South America ........................................................................................................................ 32 Fiscal Arrangements ..................................................................................................................... 35 Power of Taxation, Revenue Assignments, and Local Discretion.......................................... 35 Rate Setting Approaches and Rate Structures ........................................................................ 38 Other Fiscal Issues .................................................................................................................. 42 Main Design Features ................................................................................................................... 43 Responsibility for Paying the Property Tax ............................................................................ 43 Taxable Property ..................................................................................................................... 45 Basis of Assessment ................................................................................................................ 46 Providing Selective Property Tax Relief and Shifting Burdens to Others.................................... 53 Differentials in Tax Rates or Ratios of Assessment ............................................................... 53 Residential Relief for Individuals and Families...................................................................... 55 Institutional Exemptions and Non-residential Relief .............................................................. 58 Incentives and Disincentives ................................................................................................... 58 Administrative Arrangements and Practices ................................................................................. 62 Functional Assignments .......................................................................................................... 63 Billing, Collection, and Enforcement ..................................................................................... 67 Cadastral and Title Systems .................................................................................................... 68 Assessment and Valuation ...................................................................................................... 69 Appeal ..................................................................................................................................... 71 Role of Taxpayers and Self-Assessment................................................................................. 72 Private-Sector Roles in Property Tax Administration ............................................................ 73 Supervision ............................................................................................................................. 74 Summary and Conclusions ........................................................................................................... 74 Situation .................................................................................................................................. 74 Reform Strategies.................................................................................................................... 87 References ..................................................................................................................................... 92 Appendices .................................................................................................................................. 122 1. Countries with Sub-National Variations in Systems for Taxing Immovable Properties .. 122 2. IMF and OECD Systems for Classifying Taxes ............................................................... 123 3. Research Programs and Websites ..................................................................................... 124 4. Evaluation of Sources ....................................................................................................... 126 List of Figures Figure 1: Typical Property Tax System External Linkages .......................................................... 63 Figure 2: Relative Importance of Types of Taxes on Property: Seventy-four Selected Countries in 2009 or Latest Year (2005–2008) ...................................................................... 75 Figure 3: Percentage Breakdown of Taxes on Property: Seventy-four Selected Countries in 2009 or Latest Year (2005–2008) ....................................................................................... 76 Figure 4: Recurrent Taxes on Immovable Property as a Percent of GDP: Sixty-three Selected Countries in 2009 or Latest Year (2005–2008) ........................................................ 78 Figure 5: Recurrent Taxes on Immovable Property as a Percent of Total Taxes: Seventy-seven Selected Countries in 2009 or Latest Year (2005–2008) ............................... 79 Figure 6: Local Recurrent Taxes on Immovable Property as a Percent of Total Local Taxes: Fifty-eight Selected Countries in 2009 or Latest Year (2005–2008) ...................................... 80 Figure 7: Box Plot of Local Recurrent Taxes on Immovable Property as a Percent of Total Local Taxes by Form of Government ..................................................................................... 81 Figure 8: Box Plot of Local Recurrent Taxes on Immovable Property as a Percent of Total Local Taxes by Area(s) of Local Government Discretion ...................................................... 82 Figure 9: Box Plot of Local Recurrent Taxes on Immovable Property as a Percent of Total Local Taxes by Tax Rate Structure ........................................................................................
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