THE PAPER REPORTS on the progress of an international research project, sponsored by the RICS Education Trust into the efficacy of market value as a basis of assessment for the taxation of landed property (Connellan and Plimmer, 1996).
There are major concerns with the basis of landed property taxes in such countries/states as California, Canada, Cyprus, the Czech Republic and South Africa. There are fundamental problems of administrative efficiency, social equity and legal framework for the taxing, the spending and the collecting bodies which need to be addressed by them or their advisors.
The paper, therefore, examines critically the inherent principles of landed property tax, including the bases for which such taxes are levied as a means of devising a standard against which actual landed taxes can be measured and the 'marketing' of a landed property tax promoted (Greater Toronto, 1996) so as to achieve both the ability and the willingness to pay on the part of the taxpayers (Franzsen, 1995).
A definition is proposed for what might be considered the "best" criteria on which to base such a landed property tax, having regard to evolving historical, economic and social standards, from the perspective of the taxpayers of the different kinds of systems investigated. Such generally recognised criteria includes economic, efficient and effective administration including the assessment process.
Indeed, Beaumont (1992), on consideration of optimal property taxation opines that the central issue is a problem that perennially challenges property taxation throughout the world: the perceived fairness of the property valuation system. However, issues of vertical equity may be more important, and rather more in some societies than in others (Hizam, 1991).
The use and application of an ad valorem tax raises a number of interesting theoretical and practical questions pertaining to the basis of the property tax. To what extent should the basis be on the improved values utilising either capital or rental values or unimproved capital values? International experience would suggest the relevance of all approaches (McCluskey, 1991) and it seems that different societies would find certain criteria more acceptable than other societies.
This paper demonstrates from an analysis of some forty different property tax systems that a number of important issues can be isolated which would develop the theory of best criteria (Youngman and Malme, 1994). Empirically, we shall establish a set of evaluative factor parameters upon which the operation of a property tax system can be measured objectively and efficiently.
