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Taxation Chapter 1 Tổng Quan Về Thuế Tài Sản 2023
Taxation Chapter 1 Tổng Quan Về Thuế Tài Sản 2023
Property tax
Kien Tran Trung
School of Public Finance, UEH
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COURSE CONTENT
Chapter 1: Property Tax - A Situation Analysis and Overview
Chapter 1
M ai n t op i cs
I t ’s w h a t w e d i s c u s s t o d ay - Basic concepts
- Roles of property tax
- Introduce property tax
over the world
- Challenges of the
property tax
Basic concepts
Property, Asset, Real Estate, Land
Property tax and Taxation on property transactions
Property valuation
Roles of property tax
Property, Asset,
Real Property, Real Estate, Land
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Property
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• What is property?
General: Quality or thing owned or possessed.
Law: Article, item, or thing owned with the
rights of possession, use, and enjoyment, and
which the owner can bestow, collateralize,
encumber, mortgage, sell, or transfer, and can
exclude everyone else from it.
(businessdictionary.com)
Property
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Property
Real Personal
Property Property
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Personal Property
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Real Property
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Real Property
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Real Estate
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Land
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Immovable property
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Property Tax
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Property tax
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Individuals Companies
properties
Property taxes
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Property tax
A property tax is usually an ad valorem tax on
the value of a property, usually levied on real
estate.
The tax is levied by the governing authority of
the jurisdiction in which the property is located.
.
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Property tax
The four broad types of property taxes are land,
improvements to land (immovable man-made
objects, such as buildings), personal property
(movable man-made objects) and intangible
property.
Real property is the combination of land and
improvements.
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Taxation of Property
Transactions
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Property Valuation
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Basic Idea of Taxes on Real Property
➔ Market value
of Property
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Property Valuation
Under a property-tax system and Taxation of
Property Transactions, the government requires
or performs an appraisal of the monetary value
of each property, and tax is assessed in
proportion to that value.
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Property valuation
✓ The experience of Professional Property Valuers and
dialogue among nations through the International
Valuation Standards Committee (IVSC) have
demonstrated that, with few exceptions, there is
common worldwide agreement regarding
fundamentals that underpin the valuation discipline.
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Property valuation
✓ Local laws and economic circumstances may, on
occasion, require special (and sometimes limited)
applications, but fundamentals of valuation
methods and techniques are generally similar
throughout the world.
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Taxes are classified in various ways:
Taxing
Taxpayer Tax base
jurisdiction
Property Local
taxes taxes
LOCAL GOVERNMENTS
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LOCAL GOVERMENTS
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LOCAL GOVERMENTS
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Circumstances
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PROPERTY TAX
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Challenges
The basic idea underlying nearly all taxes on
land is that the tax should be a function of the
productive capacity of the land (and often
permanent improvements) → maintaining a
clear conceptual link between taxable value
and property productivity.
→Tracking these changes and incorporating
them appropriately into estimates of taxable
value are daunting administrative tasks
requiring both human and financial resources
and the political will to keep tax rolls up to
date.
→For a variety of political reasons,
policymakers may choose to overuse tax
exemptions that erode the tax base.
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Governments across the globe are in
one of three circumstances:
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We look for an effective property tax
system where no such system currently
exists.
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Property tax
administration issues
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PROPERTY TAX POLICY
To operationalize the property tax requires a mix of
choices regarding design issues:
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PROPERTY TAX ADMINISTRATION
Developing administrative procedures involves
addressing such tasks as:
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Issues in assessment
1.Property identification
2.Uniformity in assessment
3.Responsibility for assessment
4.Frequency of assessment
5.Appeals mechanism and
Assessment technique
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1.Property identification
(Xác định bất động sản)
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PROPERTY IDENTIFICATION
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PROPERTY IDENTIFICATION
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PROPERTY IDENTIFICATION
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2.Uniformity in assessment
(Sự không thống nhất trong việc định giá)
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Uniformity
or
Non-Uniformity
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UNIFORMITY IN ASSESSMENT
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JURISDICTION.
❖ Decentralization or centralization
If property taxes are to be fair in their
application, they must be based on
assessments that are uniform within
each taxing jurisdiction.
Uniformity is most easily achieved when
the assessment function is centralized at
the regional/state/provincial level.
→ Autonomy of each local government
???
REFORM
To ensure that the assessment system operates
effectively and fairly there are at least two
things that must be avoided:
(1) Capping or freezing assessment
(2) Utilizing preferential assessments
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4.Frequency of assessment
(Tần suất định giá)
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FREQUENCY OF ASSESSMENT
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FREQUENCY OF ASSESSMENT
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ASSESSMENT TECHNIQUE
An important component of a well-run
assessment system is an effective appeals
Mechanism and Assessment technique.
Finance and human resource requirement
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APPEALS MECHANISM AND ASSESSMENT
TECHNIQUE
(1) In most cases, this starts with a reassessment
by the assessment authority to correct factual
errors and resolve minor differences of
opinion over the value of the property.
(2) If differences cannot be resolved, the
taxpayer should be able to proceed to a
higher authority, generally made up of
valuation experts.
(3) There may be a further stage whereby the
appeal could go to a specialized tax court
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Issues in setting
tax rate
Setting the property tax rate
Variable tax rates versus uniform rates
Other land and property related taxes
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Uniformity
or
Non-Uniformity
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RATES
A single uniform property tax rate to all
properties within its taxing jurisdiction
Or
RATES
Variable tax rates have a number of advantages:
(1) First, they are also fair on the basis of
benefits received as long as the rates are set
to capture the cost of municipal services used
up by different property types or property
location.
RATES
Variable tax rates have a number of advantages:
(2) They are efficient if designed to recover the
cost of local public services consumed – no
incentive would exist for a household or firm to
alter its behavior or location to avoid the tax as
long as it matched the cost of services used up.
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RATES
Variable tax rates have a number of advantages:
(3) They are efficient as long as higher tax rates
apply to tax bases that are most inelastic in
supply.
RATES
Variable tax rates have a number of advantages:
(4) Variable tax rates have a further advantage in
that they could be used to distort decisions
deliberately to achieve certain municipal land use
objectives.
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TAXES
In addition to the property tax, there are a number
of additional land based taxes that are employed
in virtually every country.
- The range of charges is extensive:
(1) Development charges, special assessments and
value capture levies.
(2) Transfer taxes, capital gains taxes, stamp
duties, inheritance taxes, value-added taxes.
TAXES
Development charges
- It is used to recover the off-site costs of capital
infrastructure required to service new
development or growth.
- A development charge or lot levy corresponds
best to the benefits-received principle when
the costs and benefits of the infrastructure for
each property can be determined.
TAXES
Special assessment (land betterment tax)
- A special assessment is a specific charge added
to the existing property tax to pay for improved
capital facilities that border on them.
→ foot frontage and zone assessments
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TAXES
Value capture levy.
- It can be designed to recover the increase in
land value arising from a public investment.
- The levy permits the municipality to capture
(some of) the economic rents accruing to the
private sector that have been created by this
local infrastructure spending.
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Case study
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PROPERTIES
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PROPERTIES
The taxation of business properties (commercial
and industrial) at higher tax rates than residential
properties is a common practice across
countries.
PROPERTIES
Higher property taxation of commercial and
industrial properties creates a number of
efficiency and equity concerns.
(1) Efficiency in municipal service levels will not
be achieved if revenues collected from property
taxes on business properties are
used to subsidize services consumed by the
residential sector.
PROPERTIES
Further concerns with the
over-taxation of the
commercial/industrial
sector arise because this
tax represents a fixed
charge that must be paid.
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PROPERTIES
There is also an issue of
whether this over-
taxation plays a role in
location decisions.
PROPERTIES
(2) Equity is not achieved
either if those benefiting
from the services are not
paying full costs.
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" S U C C E S S I S
W A L K I N G F R O M
F A I L U R E T O
F A I L U R E W I T H N O
L O S S O F
E N T H U S I A S M . ”
WI NS TO N CHU RCHI L L