Property Valuation, 3rd Edition

Chapter 12Valuations for Land and Property Taxation

12.1 Introduction

Tax is required to produce revenue for government, and it can be nationally or locally set and raised. The expenditure is not always aligned to the raising powers; in other words, it can be raised nationally and spent in certain areas. Fairness is a guiding principle for any tax, and this normally means it should fall on those who can afford to pay it, it should not be regressive, it should be hard to avoid, and it should (preferably) be easy and cheap to collect. Land and property are an attractive source (or base) for taxation for several reasons:

• Because there is a relationship between land ownership and wealth (and therefore ability to pay), it can be marginally progressive.
• Occupiers benefit from government services, and it can be an important local tax.
• Market transactions generate price information, which is helpful when establishing the tax base.
• It has a broad base and yet is difficult to avoid or evade.
• It can be relatively cheap to administer, transparent and understandable.
• It is predictable and buoyant (via regular revaluations or reviews of the tax rate).
• It can help optimise economic use of land

Valuations are required for capital and revenue taxation purposes.

Land and property taxation (LPT) policy and legislation are shaped by political culture, socioeconomic beliefs and aspirations, so the way in which land and property are taxed is very jurisdiction specific. For example, if people's ...