Immovable Property Taxation for Sustainable and Inclusive Growth

Alexander Leodolter, Savina Princen and Aleksander Rutkowski

No 156, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: A well-designed recurrent tax on residential property (RRPT) can be an important element of the tax mix being able to foster growth, address policy issues related to inequality and contribute to the green transition. Nevertheless, tax revenues from recurrent property taxes are low in EU Member States. The paper first examines the design of efficient property taxation, which also includes removing the homeownership bias in taxation. Subsequently, it provides an overview of RRPT policies in EU Member States and discusses the political economy of property tax reforms. Finally, potential RRPT reforms to reduce inequality and support environmental goals are explored. An RRPT with a progressive rate schedule and a regularly updated tax base factoring in the energy performance of the building is able to support growth, reduce income inequality and contribute to a sustainable environment.

JEL-codes: D1 D3 D31 H2 H21 H22 H24 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2022-01
New Economics Papers: this item is included in nep-eec, nep-env, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:156

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