PROPERTY TAXATION IN TAIWAN: AN EMPIRICAL ANALYSIS OF EQUALITY WITH ADMINISTRATIVE TAX DATA

We use income tax and wealth data from Taiwan's Ministry of Finance, from 2004 to 2017, to investigate the incidence of property taxation. Specifically, we focus on the relationships among a property's market value, its assessed value, and the owner's income and wealth. Our results sh...

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Bibliographic Details
Published in:Academia economic papers 2021-09, Vol.49 (3), p.411-444
Main Authors: Fu, Chien-Hao, Tseng, Chung-Hsin
Format: Article
Language:Chinese
Subjects:
Economic theory
Economics
Property taxes
State court decisions
Taxation
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Summary:We use income tax and wealth data from Taiwan's Ministry of Finance, from 2004 to 2017, to investigate the incidence of property taxation. Specifically, we focus on the relationships among a property's market value, its assessed value, and the owner's income and wealth. Our results show that Taiwan's property tax system consistently undervalues real estate. The gap between assessed value and market value is especially prominent among high-value properties. As a result, while the assessment-sales ratio is weakly progressive regarding income, it is severely regressive regarding wealth. In addition, since this regressiveness is not evident for financial and other non-property assets, the property tax system provides incentives for people to concentrate their assets on real estate. Closing the gap between property's assessed and market values would enhance the equity of the tax system and reduce resource allocation distortions.
ISSN:1018-161X
1810-4851