A Review of Property Tax Design and Reform Experiences in OECD Countries
This report looks at crucial elements of reforms to growth-friendly recurrent taxes
on immovable property. Tax design practices in place in OECD and partner countries
are compared and analysed through the lenses of economic theory and empirical analysis.
A set of good principles and options for reforming recurrent taxes on immovable property
based on the latest experience of property tax reforms around the world are presented
that are particularly relevant to the Chinese context, where broader use of recurrent
taxes on residential properties is needed to make local public finances more sustainable.
Challenges and practices related to the administration of property taxes are explored
as well as their interplay with different tax designs. In addition, the main political
and administrative hurdles in approving and implementing property tax reforms are
discussed, and the approaches commonly employed in successfully dealing with them
are examined. Although there are major challenges in designing, reforming and managing
a recurrent property tax system, it is possible to overcome these in a manner that
allows society to reap benefits in terms of a better allocation of resources, more
stable house prices and a fairer income distribution.