Is property assessment really essential for taxation? Evaluating the performance of an 'Alternative Assessment' method

R. Horne*, D. Felsenstein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Many countries evade the formal valuation of real property for taxation purposes by using qualitative and spatial criteria in order to pursue an equitable distribution of burden. This paper evaluates the performance of a prototypical setup as such, by analyzing the relationship between property value, household income and the actual tax paid, in the exact framework of which the qualitative criteria are set to determine tax assessment. Drawing on detailed data from the Israeli Household Expenditure Surveys 1997-2005, the strong correlation between the three variables is evident. Yet, the limited differences in rates, compared with large variation in property value, make it regressive. Policy implications are relevant for many other countries using non-ad valorem taxation.

Original languageAmerican English
Pages (from-to)1181-1189
Number of pages9
JournalLand Use Policy
Volume27
Issue number4
DOIs
StatePublished - Oct 2010

Keywords

  • Assessment
  • Equity
  • Israel
  • Property tax
  • Tax burden

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