Estimating Property Tax Revenue Potential

Walters, Lawrence C.

doi:10.1002/9781118454343.ch10

Cited by 6 publications

(5 citation statements)

References 9 publications

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“…Cities identify governance and enforcement as the most critical indicators of institutional capacity for successful special assessment tax implementation, suggesting the need for strengthening these aspects. These findings align with previous studies, emphasizing the importance of shared responsibility, political stability, institutional credibility, and active citizenship in successful tax implementation [15]. As highlighted by Zhao and Larson [6], regulatory support is deemed crucial to facilitate effective financial strategies such as special assessments.…”

Section: Self-assessment Of Capacities To Implement Special Assessmen...supporting

confidence: 88%

“…However, minimal research on LVC application windfall gains from public infrastructure in the Philippines and African countries like Nigeria and Ghana [2,14]. Experiences of Cuenca, Ecuador, and Medellin, Colombia, highlight the importance of shared responsibility, political stability, institutional credibility, and active citizenship in successful LVC implementation [7,15]. Successful implementation requires a robust institutional framework, technical capacity, and political will [7,8,11,12].…”

Section: Value Capturing As a Land-based Financing Toolmentioning

confidence: 99%

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Examining Institutional Challenges of Land Value Capture: The Case of Implementing Land-based Taxes in the Philippines

Samantela,

Maquiling

2024

JHES

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Leveraging the increase in property values emerges as an innovative financing method, enabling property owners and developers to contribute to collective benefit. The special assessment tax or special levy is a land value capture tool used to recover the costs of government infrastructure projects. Despite its long-standing existence in the Philippines’ Local Government Code, it is underutilized and its potentials as revenue sources have not been realized. This qualitative study combines extensive literature reviews and semi-structured interviews, including a self-assessment scoring of government staff in the cities of Metro Manila, citing perspectives and experiences in land taxation to examine institutional challenges in utilizing the special assessment tax. Findings reveal that institutional, financial, and technical capacity problems have prevented its utilization despite existing legal mechanisms. Moreover, there is a noteworthy gap in understanding and application at the local level, as the concept of land value capture is yet to be mainstreamed in local public finance. The discussions aim to inform cities and municipalities about the untapped potential of the special assessment tax as a viable revenue source for local development and the regulation of urban growth. Additionally, the study advocates for the importance of building capacities in land-based financing. It emphasizes the need for support and improvements in the current institutional arrangements of land valuation to address socio-economic inequalities.

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Section: Self-assessment Of Capacities To Implement Special Assessmen...supporting

confidence: 88%

Section: Value Capturing As a Land-based Financing Toolmentioning

confidence: 99%

Examining Institutional Challenges of Land Value Capture: The Case of Implementing Land-based Taxes in the Philippines

Samantela,

Maquiling

2024

JHES

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“…Both of these are far below what is achieved by leading users of property taxes such as the UK (3.4 per cent), France (2.4 per cent) and Denmark (2.1 per cent). Figure 1 examines the burden of recurrent property taxes as a percentage of income from capital and land in the EU by using a methodology developed by Walters (2013). Income was derived by taking the gross value added (total output less that part used for intermediate consumption) and deducting employee compensation (wages and salaries plus employers' social contributions).…”

Section: The Role Of Value-based Recurrent Property Taxes In a Fiscal Systemmentioning

confidence: 99%

Achieving successful implementation of value-based property tax reforms in emerging European economies

Grover

Törhönen

Munro-Faure

et al. 2017

JERER

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Purpose This paper aims to report the findings of a study of nine countries in Europe and Central Asia (ECA) that have either recently introduced or are working towards the introduction of value-based recurrent property taxes. Although many countries have recurrent property taxes, often, they are not value-based and raise relatively little revenue. This paper examines the barriers to the introduction of value-based property taxes and discusses how they can be overcome. Design/methodology/approach Case studies of recurrent property taxation were undertaken for eight countries from the World Bank’s ECA region. The sample included countries at different stages in the development of value-based property tax systems. A ninth country, The Netherlands, which has a well-developed mass valuation system, was included for comparison. Findings Barriers to the introduction of value-based recurrent property taxes are technical and political or governance ones. The technical barriers include the comprehensiveness of property registration, the quality of transaction price data, the extent to which the valuation infrastructure meets internationally recognised standards and the quality of tax collection systems. The principal political and governance problems are the unpopularity of property taxes, the need to convince the public that they are fair and the lack of champions of property taxation in government. Research limitations/implications The case studies are drawn from the ECA region, but the issues raised apply in many other parts of the world. A case study approach produces rich data for each example that enables key issues to be explored in depth. Practical implications The study has identified issues and ways of approaching them that are relevant to countries seeking to introduce value-based recurrent property taxes so that they can learn from the experience of others. Originality/value The approach has enabled a systematic comparison between countries so that common experiences and issues are identified.

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“…More specifically, the revenue potential of the property tax in any given setting may be computed by using a formula that accounts for (i) the legal tax base, which defines the kind of objects to be taxed, and (ii) the nominal tax rate, while setting (iii) the coverage ratio (registered taxable objects versus total taxable objects), (iv) the valuation ratio (assessed values versus 'real' market values), and (v) the collection ratio (real collected amounts versus total liabilities billed) at a value of 1 (Kelly, 2014;Norregaard, 2013;Walters, 2013). In addition, the actual costs of tax administration would have to be taken into account.…”

Section: Tax Potentialmentioning

confidence: 99%

The Political Cost of Local Revenue Mobilization: Decentralization of the Property Tax in Indonesia

von Haldenwang

2017

Public Finance and Management

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Taxes on real property have been identified as a source of income whose potential is currently underused by many countries. Indonesia has recently decentralized the property tax to the local level, but has this led to a better use of the tax potential from this source? A look at revenue figures provided by the Indonesian Ministry of Finance suggests that reforms may have boosted tax collection at an aggregate level. However, closer scrutiny of seven local cases reveals that local governments are far from tapping the full potential of the property tax. Most of them are struggling with deficient data, low public acceptance of the tax and huge amounts of tax liabilities. in addition, local governments shy away from the political costs associated with more active revenue mobilization.

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Estimating Property Tax Revenue Potential

Cited by 6 publications

References 9 publications

Examining Institutional Challenges of Land Value Capture: The Case of Implementing Land-based Taxes in the Philippines

Examining Institutional Challenges of Land Value Capture: The Case of Implementing Land-based Taxes in the Philippines

Achieving successful implementation of value-based property tax reforms in emerging European economies

The Political Cost of Local Revenue Mobilization: Decentralization of the Property Tax in Indonesia

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