ATI Working Paper
WP/19/01 ATI Working Paper The evolution of property taxes in post- Socialist countries in Central and Eastern Europe Jan Brzeski Anna Románová Riël Franzsen The evolution of property taxes in post-Socialist countries in Central and Eastern Europe Jan Brzeski1 Anna Románová2 Riël Franzsen3 ABSTRACT This paper discusses the evolution of recurrent property taxes in transition economies of Central and Eastern Europe (CEE). The persistent use of an area-based property tax formula in some of these countries and the generally weak revenue performance of the property tax in most of these countries tend to slow the growth of urban productivity and, consequently, impact negatively on overall economic performance. It focuses on property taxation characteristics in these countries that are relevant to the urban (re)development challenges, describing in more detail the approaches in various countries, selected on the basis of their different tax-base formulae, revenue performance, reform directions and reform efforts. Lastly, the paper suggests possible ways forward to ensure a more significant role for the property tax in urban (re)development processes in CEE countries. Key words: CEE countries, post-Socialist economies, property tax, tax-base formulae JEL Classification: H71; P25; R51 1 International Property Tax Institute, Poland 2 Pavol Jozef Šafárik University in Košice, Slovakia 3 African Tax Institute, University of Pretoria, South Africa 1 1. Introduction ‘Transition countries’ constitute a wide range of post-Socialist economies in Central Europe, Eastern Europe, South-Eastern Europe, the Baltics, the Russian Federation and the former Socialist republics of Central Asia. These post-Socialist economies, undergoing a transition towards a market economy, have been facing a daunting challenge of reallocating their basic resources (i.e., land, capital, labour) and reshaping their ‘misdeveloped’4 cities towards higher urban productivity through more efficient use of urban land and buildings.
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