Considerations on the introduction of residential property tax

Abstract

There have been various opinions formulated on the introduction of property tax and the expected revenues. It is this debate we wish to contribute to in several respects. A critical point of the introduction and operation of property tax is determining the base of the tax, i.e. the value of dwellings. The main advantage of our concept is that it would make it possible to levy property tax with little input, based on real market prices and, at the same time, it would make it easy to filter out the most glaring irregularities. The volume of revenues to be expected of the various property tax concepts is a similarly complex question. In this study, we present the estimated volume of these revenues using property market data, highlighting on tax exemptions depending on the value of property and the owner of property respectively. In addition to the well-known tax concepts, we also outline a property tax combined with personal income tax. What is meant by the latter is an opportunity for taxpayers to deduct property tax from their PIT. This would make it possible, within the framework of social justice, not to increase burden on citizens with a declared income proportionate with their property wealth but to increase burden on those who own valuable property despite a low declared income. Accumulating considerable wealth from undeclared income may be typical in the latter group.