Taxing Immovable Property Revenue Potential and Implementation Challenges

IMF Working Papers, May 29, 2013

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The tax on immovable property is described as "probably the most unpopular among tax instruments," in part because it is salient and hard to avoid.
Economists emphasize virtues of the property tax: relatively low efficieny costs, benign impact on growth, and high score on fairness.
The property tax is generally considered to be underutilized in most countries.
The paper takes stock of arguments for real property taxation, presents an updated data-set for high- and middle-income countries to illustrate its use, and reflects renewed and widespread interest in property tax reform globally.
The paper discusses many policy and administrative issues that must be carefully considered as prerequisites for successful property tax reform.

Property tax advantages highlighted:
- Relatively low efficieny costs
- Benign impact on growth
- High score on fairness
Property tax is underutilized despite these advantages.
Renewed global interest in property tax reform is noted.

Presents an updated data-set for high- and middle-income countries to illustrate property tax use.

Successful property tax reform requires careful consideration of many policy and administrative issues (the paper discusses these issues in detail).

Subject: Land tax, National accounts, Personal income, Property tax, Revenue administration, Taxes, Transaction tax
Keywords: Africa, assessed value, average revenue, book value, Caribbean, collection ratio, Eastern Europe, Global, immovable property tax, immovable property taxes, Land tax, market price, Personal income, Property tax, property tax administration, property tax base, property tax reform, property tax tax revenue, property tax yield, recurrent property tax, reform while, South America, stamp duty, Transaction tax, underdeveloped property tax market, WP