Guide to International Experience in Property Tax (Volume I): Tax System, Valuation and Practice
Compiled by Liu Wei, He Yang
Published by Economic Science Press, September 2022
Book Introduction
Guide to International Experience in Property Tax is a compilation of years of research outcomes produced by the Property Tax Research Team of the Peking University–Lincoln Institute Center for Urban Development and Land Policy. It offers a comprehensive, systematic review and introduction of international experience covering property tax theories, tax systems, valuation and tax collection and administration.
This book provides knowledge and information for experts, scholars, industry practitioners and the general public interested in property tax, and delivers international references for discussions on property tax reform.
The book is split into two volumes. Volume I sorts out international experience targeting hot-button property tax issues; Volume II elaborates on the property tax systems and administration practices of representative countries and regions with detailed case studies.
The newly released Volume I addresses hot topics including tax design, property valuation and tax collection, and organizes relevant international experience in a Q&A format.
The two compilers are core researchers of the PKU-Lincoln Center Property Tax Research Team.
Liu Wei, Senior Policy Research Fellow, Peking University–Lincoln Institute Center for Urban Development and Land Policy
He Yang, Professor and Vice Dean, School of Public Finance and Taxation, Central University of Finance and Economics; Adjunct Research Fellow, PKU-Lincoln Center
About Liu Wei
Liu Wei serves as Senior Policy Research Fellow at the Peking University–Lincoln Institute Center for Urban Development and Land Policy. His research focuses on property tax and land policy. He earned his bachelor’s and master’s degrees in Land Resource Management from the School of Public Administration, Renmin University of China. He has published more than ten papers on property tax in core academic journals and participated in numerous provincial and ministerial policy research projects.
About He Yang
He Yang is Professor, Doctoral Supervisor and Vice Dean at the School of Public Finance and Taxation, Central University of Finance and Economics. He completed his undergraduate, master’s and doctoral studies at the School of Finance, Renmin University of China, and worked as a postdoctoral researcher at the Chinese Academy of Social Sciences Institute of Finance and Economics, as well as a visiting scholar at the School of Public and Environmental Affairs, Indiana University Bloomington. He is an academic committee member of the China International Taxation Research Institute and an adjunct researcher at the PKU-Lincoln Center, and belongs to the first cohort of National Top-Tier Tax Talents. He presides over key National Social Science Fund projects and National Natural Science Fund Youth Projects, has published over 50 papers in domestic and international journals, and authored four Chinese and English monographs. He has won first prize and special prize in national international taxation academic achievement evaluations.
Table of Contents
Part One Overview of International Property Tax Experience
What is property tax?
Box 1-1 OECD Definition of Recurrent Real Estate Tax
What other names are used for property tax?
Box 1-2 Are property tax and real estate tax the same levy?
How important is property tax revenue to fiscal and tax revenue across jurisdictions?
What functions does property tax serve?
Case 1-1 Lessons from South Korea and Japan’s Attempts to Regulate Housing Prices Through Holding-Stage Property Tax
What is land value capture, and how can property tax realize land value capture?
Box 1-3 Henry George, Progress and Poverty, and Land Value Recapture
Box 14 Land Value Capture Policy Instruments Based on Property Tax: Special Assessments and Land Value Financing
How does property tax differ from other types of taxes?
Is there double taxation between property tax and land transfer fees?
What are the traditional, modern and user-charge perspectives on property tax?
Box 1-5 Classic Literature on Property Tax Theories
Can property tax be levied on state-owned land under a public land ownership system?
Case 1-2 Countries and regions that impose property tax on publicly owned land
Part Two International Experience with Property Tax Systems
I Taxpayers
What approaches are used to define taxpayers?
How to identify taxpayers for leased public land?
How to define taxpayers for co-owned properties?
How to identify taxpayers under condominium ownership?
II Taxable Objects
What assets fall under the property tax base?
Box 2-1 Bibliography of legal scopes of taxable property in selected countries
Are farmlands and their buildings subject to property tax? Are there special provisions?
Case 2-1 Use-Value Assessment and Development Taxation of Farmland in the United States
Are illegal constructions and informal housing taxable?
Case 2-2 Latin American Experiences in Improving Community Public Services by Taxing Informal Housing
Are construction-in-progress projects subject to property tax?
III Property Tax Exemptions
What types of real estate qualify for property tax exemptions?
19 Are exempt properties truly tax-free? What are payment-in-lieu charges?
Case 2-3 Property Tax Payments in Lieu of Exemptions in British Columbia, Canada
Case 24 How the UK Gradually Introduced Taxation on Crown Properties
Case 25 “Tax First, Subsidy Later” Mechanism for Partially Exempt Properties in Hong Kong SAR
IV Tax Base (Assessment Value)
What serves as the tax base for property tax?
Case 2-6 How UK Property Tax Bases Shifted from Rental Value to Capital Value
Case 27 Difficulties in Updating Assessment Values in Germany
Case 28 Eastern European Transition Countries’ Experiences Establishing Capital-Value-Based Property Tax Regimes
Case 29 Alignment of Annual Rental Value with Land Leases in Hong Kong SAR
V Tax Rates
What methods are adopted to set property tax rates?
Case 2-10 Local Fiscal Autonomy Under Standard National Fixed Rates in Japan’s Fixed Asset Tax
Case 2-11 Germany’s “Federal Base Rate × Local Multiplier” Property Tax Rate Structure
What types of property tax rate schedules exist?
Case 2-12 Separate, Classified, Progressive Property Tax Rates in South Korea
Case 2-13 Tiered Classified Property Tax Rates in Vancouver, British Columbia, Canada
Case 2-14 Classified Progressive Property Tax Regime in Singapore
Case 2-15 Banded Council Tax Rates in the United Kingdom
Box 2-2 Debates Over Flat vs Classified vs Progressive Rates in Hong Kong SAR
VI Tax Relief and Burden Caps
Why implement property tax exemptions and burden-limiting mechanisms?
Case 2-16 Proposition 13 in California, United States
24 What categories of property tax relief measures exist?
25 What is an assessment value growth cap?
26 What is an assessment ratio?
27 What is use-value assessment?
28 What are income-linked circuit breaker reliefs?
29 What is tax deferral?
Box 2-3 Tax Liens
30 What indirect property tax burden control instruments are available?
Case 2-17 Fixed Asset Tax Relief and Burden Control in Japan
Case 2-18 Council Tax Relief for Specific Households and Property Types in the UK
Case 2-19 Temporary Rates Relief and Burden Control in Hong Kong SAR
Case 2-20 Property Tax Relief Mechanisms in the United States
VII Property Tax Valuation
31 What is property tax assessment?
32 What value definition is adopted for tax assessment?
Case 2-21 Relevant Valuation Concepts in the United States
33 What is an assessment roll?
34 Initial assessment vs reassessment
Box 24 Valuation of Newly Built Properties: Ensuring Consistent Tax Bases
35 How to assess price-controlled affordable housing?
Case 2-22 Community Land Trusts and Property Tax Assessment in the U.S.
Case 2-23 UK Council Tax Case Law on Restricted-Price Housing Valuation
36 Valuation of mixed-use residential-commercial buildings: UK case study
Case 2-24 Examples of Mixed-Use Valuation from UK Council Tax Assessment Manuals
37 How to account for land lease terms under public land ownership in property tax valuation?
VIII Valuation Authorities
38 Which agencies conduct property tax assessments?
Box 25 Roles of the private sector in property tax valuation
Case 2-25 BC Assessment: Statutory Provincial Agency, British Columbia, Canada
Case 2-26 Valuation Office Agency of the UK Central Government
Case 2-27 Rating and Valuation Department, Hong Kong SAR: Integrated Valuation and Collection Functions
Case 2-28 Lithuania State Land Registry: Integration with All Government Basic Databases
IX Dispute Resolution
39 What is the appeal process for property tax assessments?
Case 2-29 Property Tax Dispute Procedures in British Columbia, Canada
X Tax Payment Procedures
40 What payment channels are available for property tax?
41 Is installment payment permitted?
42 What are assessment notices and tax bills?
43 Are property tax assessment records publicly accessible?
Box 26 Global Platforms for Public Inquiry of Property Tax Assessment Values
XI Tax Arrears Enforcement
44 How are unpaid property taxes handled?
Case 2-30 Council Tax Arrears Recovery in the UK: Deductions from Wages and Benefits
Case 2-31 Rates Enforcement in Hong Kong SAR: Restrictions on Property Transfers
Case 2-32 Property Tax Liens in the United States
XII Data Sharing
45 Which government departments hold data required for property tax assessment and collection? How to realize cross-agency data sharing?
Box 27 Self-declaration by taxpayers
Case 2-33 Interdepartmental Data Sharing in British Columbia, Canada
Case 2-34 Lithuania State Land Registry
46 What new technologies support open property tax data sharing?
47 What are the applications of property tax assessment datasets?
XIII Division of Government Responsibilities
48 What principles govern the allocation of legislative and administrative powers for property tax?
49 Models for dividing legislative authority across tiers of government
50 Models for allocating rate-setting powers among government levels
51 Models for assigning tax assessment responsibilities to different government tiers
52 How tax collection functions are divided across government levels
Part Three Mass Appraisal and Computer-Assisted Mass Appraisal (CAMA) Systems
53 What is mass appraisal? How does it differ from conventional single-property valuation?
Box 3-1 Origins of Mass Appraisal Methodology
54 What core mass appraisal models exist, and which property types do they apply to?
Box 3-2 Property Categories Suited to Core Mass Appraisal Models
55 Standard workflow of mass appraisal for property tax purposes
Box 3-3 Glossary of Property Tax Valuation Terminology
56 Field data collection approaches
Case 3-1 Data Collection Model of BC Assessment, Canada
Box 34 New Technologies for Property Tax Data Collection
Box 35 Legal Basis and Necessity of On-Site Inspections for Valuation
57 Grouping properties, coding and building mass appraisal models
Case 3-2 Competitive Market Set (CMS) Methodology, British Columbia, Canada
58 Mass appraisal of single-family homes via market comparison and cost approaches: North American cases
59 Mass appraisal of high-rise residential buildings via parametric valuation: Hong Kong SAR case
60 Direct comparison mass appraisal for high-rise apartments: British Columbia, Canada case
61 Income-based mass appraisal for commercial real estate: British Columbia, Canada case
62 Parametric valuation for retail premises: Hong Kong SAR case
63 Cost-based mass appraisal for heavy industrial properties: British Columbia, Canada case
64 Quality control indicators for valuation outputs
65 What is a Computer-Assisted Mass Appraisal (CAMA) system?
Box 36 Origins of CAMA Systems
67 Core modules and functions of CAMA platforms
68 Main development stages for CAMA systems
69 Sourcing CAMA software
70 Hardware requirements for CAMA operations
71 Integration of CAMA with cross-departmental land information databases
72 Mechanisms for shared access to CAMA systems
Box 37 Leading International Organizations, Technical Standards and Open Resources for Property Tax Valuation
73 Applications of geospatial technology in property tax assessment and administration
Box 38 Basic Concepts, Functions and Evolution of Geographic Information Systems (GIS)
Appendix Classic Monographs on Property Tax
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