The Property Tax as a Tax on Value: Deadweight Loss

Richard Arnott and Petia Petrova
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Petia Petrova: Department of Economics, Boston College

No 203, IDEP Working Papers from Institut d'economie publique (IDEP), Marseille, France

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: tv, the tax rate on pre-development land value; ts, the tax rate on post development residual site value; and tk, the tax rate on structure value. Arnott (2002) identified the subset of property value tax systems which are neutral. This paper investigates the relative efficiency of four idealized, non-neutral property value tax systems [i) “Canadian” property tax system: tv=0, ts=tk ; ii) simple property tax system: tv=ts=tk ; iii) residual site value tax system:; tk=0, tv=ts; iv) differentiated property tax system: tv=ts > tk > 0] under the assumption of a constant rental growth rate.

Keywords: Property Taxation; Site Value Taxation; Land Taxation; Deadweight Loss. (search for similar items in EconPapers)
JEL-codes: H2 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2002-04, Revised 2002-04
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Property Tax as a Tax on Value: Deadweight Loss (2006)
Working Paper: The Property Tax as a Tax on Value: Deadweight Loss (2002)
Working Paper: The Property Tax as a Tax on Value: Deadweight Loss (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:iep:wpidep:0203

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