THE PROBLEM OF PROPERTY TAX Essay

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Introduction In most developed countries, properties tax plays a significant role in the local government. In Canada, Australia, and the USA they are the main source of Municipalities revenue. About a half of municipals revenues in Canada is derived from property taxes . An approximate $ 14 billion was collected in 2007 from the taxes by municipalities in Ontario province; this was an approximate 45% of all the revenue collected by this municipals. Due to the revenue contribution of these taxes, municipality has constantly raised these taxes on per capita basis, from $ 864 dollar in 1988 to $ 1, 035 in 2007 . Nevertheless, it is still argued that this tax contribute to less than 3% of country’s GDP, implying that the taxes some problems…show more content…
Probably, the taxpayer will resist any form of increase especially when they feel the raise is not justified by an increase in provision of services. The fact that this tax is based on the assessed property market value makes it unpredictable and volatile. Often the market value of properties will change in an inconsistent manner. The values of some property will drastically rise, while others will rise in a relatively slow pace. This will result in a higher tax burden to those property owners whose property values are increasing at higher than the municipality average rate. The problem is experienced even in cases whereby the municipal collects a fixed amount of revenue. Unevenly distribution of taxes is caused merely by the already stated fact; that is some property market value will rise at higher rate than others . Market value of a particular property may rise than average municipal rate due to various reasons. Some of these reasons such as Property renovation might be under direct control of the owner while others might not be. Neighborhood changes such as new infrastructure and social amenities are some of the indirect reasons . It does not require extreme wisdom to see that it is unfair for property (especially home) owners to receive large property tax bill on properties that they do not intended to sell. Property owners are likely to enjoy major benefits
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