Fiscal, Distributional and Efficiency Impacts of Land and Property Taxes

Motu Economic and Public Policy Research Working Paper No. 09-14

72 Pages Posted: 18 May 2010

See all articles by Andrew Coleman

Andrew Coleman

Motu Economic and Public Policy Research Trust

Arthur Grimes

Motu Economic and Public Policy Research Trust

Date Written: September 1, 2009

Abstract

Land taxes are known to be amongst the most efficient forms of taxation since land is an immobile factor; property (capital value) taxes are less efficient owing to the tax on improvements. However there is little international (or New Zealand) evidence regarding the distributional impacts of land and property taxes. Nor is there much New Zealand evidence on their potential fiscal implications or about the taxes’ impacts on asset values and debt positions. We explore impacts that may arise from a range of land and property taxes that differ across certain features (e.g. comprehensiveness and degree of grand-fathering). Both partial and general equilibrium models are used. The results provide a basis for considering alternative taxation options involving land or property taxes.

Keywords: land tax, property tax

JEL Classification: H21, H22, H24

Suggested Citation

Coleman, Andrew and Grimes, Arthur, Fiscal, Distributional and Efficiency Impacts of Land and Property Taxes (September 1, 2009). Motu Economic and Public Policy Research Working Paper No. 09-14, Available at SSRN: https://ssrn.com/abstract=1604245 or http://dx.doi.org/10.2139/ssrn.1604245

Andrew Coleman (Contact Author)

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

HOME PAGE: http://www.motu.org.nz

Arthur Grimes

Motu Economic and Public Policy Research Trust ( email )

19 Milne Terrace
Island Bay
Wellington 6002
New Zealand

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