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The Property Tax as a Tax on Value: Deadweight Loss

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Author Info
Richard Arnott () (Boston College)
Petia Petrova () (Boston College)

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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: the tax rate on pre-development land value; the tax rate on post- development residual site value; and 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; (ii) simple property tax system; (iii)residual site value tax system;( iv) differentiated property tax system under the assumption of a constant rental growth rate.

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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 532.

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Length: 41 pages
Date of creation: 02 Jan 2002
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Handle: RePEc:boc:bocoec:532

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Related research
Keywords: property taxation site value taxation land taxation deadweight loss

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H2 - Public Economics - - Taxation, Subsidies, and Revenue

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bentick, Brian L, 1979. "The Impact of Taxation and Valuation Practices on the Timing and Efficiency of Land Use," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 859-68, August. [Downloadable!] (restricted)
  2. Wheaton, William C., 1982. "Urban residential growth under perfect foresight," Journal of Urban Economics, Elsevier, vol. 12(1), pages 1-21, July. [Downloadable!] (restricted)
  3. Richard Arnott, 1998. "Neutral Property Taxation," Boston College Working Papers in Economics 411., Boston College Department of Economics. [Downloadable!]
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  4. Arnott, Richard J., 1980. "A simple urban growth model with durable housing," Regional Science and Urban Economics, Elsevier, vol. 10(1), pages 53-76, March. [Downloadable!] (restricted)
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  5. Arnott, Richard J & Lewis, Frank D, 1979. "The Transition of Land to Urban Use," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 161-69, February. [Downloadable!] (restricted)
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  6. Fujita, Masahisa, 1976. "Spatial patterns of urban growth: Optimum and market," Journal of Urban Economics, Elsevier, vol. 3(3), pages 209-241, July. [Downloadable!] (restricted)
  7. McDonald, John F., 1981. "Capital-land substitution in urban housing: A survey of empirical estimates," Journal of Urban Economics, Elsevier, vol. 9(2), pages 190-211, March. [Downloadable!] (restricted)
  8. Capozza, Dennis & Li, Yuming, 1994. "The Intensity and Timing of Investment: The Case of Land," American Economic Review, American Economic Association, vol. 84(4), pages 889-904, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Teemu Lyytikäinen, 2007. "The Effect of Three-rate Property Taxation on Housing Construction," VATT Discussion Papers 419, Government Institute for Economic Research (VATT). [Downloadable!]
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