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Estimating property tax potential in urban local bodies using satellite imagery

Author

Listed:
  • Abhishek Seth

    (Indian Institute of Technology Roorkee)

  • Manish K. Singh

    (Indian Institute of Technology Roorkee)

  • Diya Uday

    (xKDR Forum)

Abstract

Property taxes (PTs) are the primary own-source revenue for Indian urban local bodies (ULBs), yet actual collections fall short of potential, constraining service delivery. Existing studies have documented this gap but have been limited to state or district-level analysis due to the absence of reliable municipal data. This paper exploits new geospatial datasets-ULB boundary maps, nighttime lights, and building volume to estimate PT demand at the ULB level in Karnataka. Using cross-sectional data for 268 ULBs in 2019-20, we show that the sum of building volume (SoBV) within a ULB boundary alone can explain over 80% of the variation in PT demand across ULBs, with a 1% increase in SoBV predicting a 1.09% rise in demand. Benchmarking exercises reveal stark regional disparities aligned with historical administrative boundaries. These findings demonstrate how non-government spatial data can measure fiscal capacity, verify self-reported statistics, and highlight institutional legacies that shape urban tax performance.

Suggested Citation

  • Abhishek Seth & Manish K. Singh & Diya Uday, 2026. "Estimating property tax potential in urban local bodies using satellite imagery," Working Papers 47, xKDR.
    • Handle: RePEc:anf:wpaper:47
    as

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    References listed on IDEAS

    as
    1. Martin Grote & Jean-François Wen, 2024. "How to Design and Implement Property Tax Reforms," IMF Fiscal Affairs Department 2024/006, International Monetary Fund.
    2. Doll, Christopher N.H. & Muller, Jan-Peter & Morley, Jeremy G., 2006. "Mapping regional economic activity from night-time light satellite imagery," Ecological Economics, Elsevier, vol. 57(1), pages 75-92, April.
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    4. M. Govinda Rao, 2013. "Property Tax System in India: Problems and Prospects of Reform," Working Papers 13/114, National Institute of Public Finance and Policy.
    5. Abhishek Singhal & Sohini Sahu & Siddhartha Chattopadhyay & Abhijit Mukherjee & Soumendra N Bhanja, 2020. "Using night time lights to find regional inequality in India and its relationship with economic development," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-18, November.
    6. Abhishek Seth & Manish Kumar Singh & Diya Uday, 2025. "Are property taxes buoyant? Evidence from Indian states," Working Papers 42, xKDR.
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    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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