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The Property Tax as a Tax on Value: Deadweight Loss

Richard Arnott () and Petia Petrova ()

International Tax and Public Finance, 2006, vol. 13, issue 2, 241-266

Abstract: Consider an atomistic developer who decides when and at what density to develop his land, under a property value tax system characterized by three time-invariant tax rates: τ V , the tax rate on pre-development land value; τ S , the tax rate on post-development residual site value; and τ K , the tax rate on structure value. Arnott (2005) identified the subset of property value tax systems that are neutral. This paper investigates the relative efficiency of four idealized, non-neutral property value tax systems [(i) “Canadian'' property tax system: τ V =0, τ S =τ K ; (ii) simple property tax system: τ V =τ S =τ K ; (iii) residual site value tax system: τ K =0,τ V =τ S ; (iv) two-rate property tax system: τ V =τ S > τ K > 0] under the assumption of a constant rental growth rate. Copyright Springer Science + Business Media, Inc. 2006

Keywords: property taxation; site value taxation; land taxation; deadweight loss (search for similar items in EconPapers)
Date: 2006
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Working Paper: The Property Tax as a Tax on Value: Deadweight Loss (2002) Downloads
Working Paper: The Property Tax as a Tax on Value: Deadweight Loss (2002) Downloads
Working Paper: The Property Tax as a Tax on Value: Deadweight Loss (2002) Downloads
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