In Los Angeles, someone who has owned a median-priced home for 14 years—the average length of ownership in the city—paid about $4,400 in property taxes last year, or about $3,600 less than a new owner of an identical home, who paid nearly $8,000. This gap between the tax bills for new and established homeowners grew by $400 last year alone, and has increased by $1,500 in the past four years, according to the annual 50-State Property Tax Comparison Study by the Lincoln Institute of Land Policy and the Minnesota Center for Fiscal Excellence.
Los Angeles is one of 29 large cities included in the report where assessment limits cap annual growth in the assessed value of individual properities, a policy that favors longtime homeowners. When real estate prices rise, these assessment limits shift more of the tax burden to newer homeowners, whose properties are assessed closer to the market value. Overall, in the 29 cities with these assessment limits, new homeowners paid 30 percent more in taxes last year than those who have owned their homes for the average duration within their city, more than double the 14-percent disparity four years earlier.
The 50-State Property Tax Comparison Study explores several key factors influencing property taxes, providing a comprehensive analysis of effective property tax rates—the tax paid as a percentage of market value—in 123 cities in every U.S. state and Washington, DC.
Drawing on data for 73 large U.S. cities, the study explains why property taxes vary so widely from place to place. Reliance on the property tax is chief among the reasons. Cities with high local sales or income taxes do not need to raise as much revenue from the property tax and thus have lower property tax rates on average. For example, Bridgeport, Connecticut, has one of the highest effective tax rates on the median-valued home, while Birmingham, Alabama, has one of the lowest. But the average Birmingham resident pays 32 percent more in total local taxes when accounting for sales, income, and other local taxes.
Property values are the other crucial factor explaining differences in tax rates. Cities with low property values need to impose a higher tax rate to raise the same revenue as cities with high property values. For example, the effective tax rate on the typical home in Detroit, which has the lowest median home value in the study, is three times higher than in San Francisco, which has the highest, after accounting for assessment limits. In Detroit, to raise $3,206 per home—the national average tax bill on a median-valued home—would require an effective tax rate 23 times higher than in San Francisco.
Other drivers of variation in property tax rates include the different treatment of various classes of property, such as residential and commercial, and the level of local government spending.
Among the largest cities in each state, the average effective tax rate on a median-valued home was 1.4 percent in 2019, with wide variation across cities. Four cities have effective tax rates that are at least double the national average—Aurora (IL), Bridgeport, Newark(NJ), and Detroit. Conversely, seven cities have tax rates less than half of the average—Honolulu, Boston, Charleston (SC), Denver, Cheyenne (WY), Birmingham, and Nashville.
Commercial property tax rates on office buildings and similar properties also vary significantly across cities. The effective tax rate on a $1 million commercial property is 1.9 percent, on average, across the largest cities in each state. The highest rates are in Detroit, Providence, Chicago, and Bridgeport, where rates are at least two-thirds higher than average. Rates are less than half of the average in Cheyenne, Seattle, and Charlotte.
The report is available for download on the Lincoln Institute website:
Improving Value-Based Taxation of Real Property in Latvia
July 7, 2020 - July 8, 2020
Free, offered in English
Faculty: Albina Aleksienė, Sarmīte Barvika, Paul Bidanset, Andrejs Birums, Aldis Bukss, Riël Franzsen, Rita Pētersone, Ronald Rakow, Enid Slack, Tambet Tiits, Alija Turlaja, Joan Youngman
Co-Sponsors: Riga Technical University, State Land Service of Latvia
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This workshop, developed in collaboration with Riga Technical University and the State Land Service of Latvia within the Ministry of Justice, provides an opportunity for public officials in Latvia to hear presentations from academic experts and practitioners in valuation, law, and economics. The program focuses on a variety of property tax issues, including current situations and practices in the Baltic region, and offers a forum to exchange ideas on local tax issues facing policymakers.
The agenda features sessions on valuation methods and tax equity; international experiences and challenges with alternative tax systems; approaches to residential taxation; mass valuation applications, standards, and data; the role of the property tax in sustainable land management and urban planning; considerations in tax rate setting; and enhancing communication and public awareness of tax policies. Many of the sessions will also address the impact of COVID-19 on property taxation and potential solutions.
Land Value Taxation, Local Government, Property Taxation, Valuation, Value-Based Taxes
Graduate Student Fellowships
2020 C. Lowell Harriss Dissertation Fellowship Program
Submission Deadline:
March 16, 2020 at 6:00 PM
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The Lincoln Institute's C. Lowell Harriss Dissertation Fellowship Program assists Ph.D. students, primarily at U.S. universities, whose research complements the Institute's interests in land and tax policy. The program provides an important link between the Institute's educational mission and its research objectives by supporting scholars early in their careers.
2021 David C. Lincoln Fellowship Symposium: Measuring the Value of Land
January 28, 2021 - January 29, 2021
United States
Offered in English
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The David C. Lincoln Fellowships in Land Value Taxation were established to encourage academic and professional interest in land value taxation through support for major research projects. This program honors David C. Lincoln, founding chairman of the Lincoln Institute, and his long-standing commitment to land value taxation studies by encouraging scholars and practitioners to undertake new work on the theory of land value taxation and its application to contemporary fiscal systems.
The 2019-2020 program focuses specifically on identifying practical land valuation methods that could be employed by assessors and public finance officials to measure changes in land values induced by public investment. Research projects use a data set that offers 12 years of land sales, improved sales, and assessment data from a large urban county.
This event provides an opportunity for current David C. Lincoln Fellows to share their research on land valuation methods and receive feedback from valuation practitioners and other experts.
El curso presenta conceptos fundamentales, discute argumentos y analiza evidencias sobre la relación entre las prácticas urbanísticas del sector público y privado, el comportamiento de los mercados de suelo y los sustentos legales de la gestión social de la plusvalía del suelo urbano. Se revisará una variedad de alternativas de instrumentos diseñados para redistribuir los costos y beneficios de la urbanización. Serán discutidos instrumentos urbanísticos de gestión de derechos de desarrollo, de uso del suelo conforme a su función social, y de regulación urbanística del mercado de suelo. Los instrumentos que se analizarán tienen en común una visión amplia del territorio y de las acciones que permitan su adecuada gestión.
Relevancia
Los recursos públicos disponibles para satisfacer las carencias de infraestructura y servicios en las ciudades de América Latina son escasos y se distribuyen de manera desigual en el espacio, tanto en cantidad como en calidad. Al realizar inversiones en infraestructura y servicios públicos, el Estado genera una valorización del suelo que beneficia a determinados propietarios, sin que sea el resultado del esfuerzo o inversión de éstos. Lo anterior produce una transferencia de recursos públicos a entidades particulares, sin posibilidad de recuperar los costos de la obra pública. La gestión social de la valorización permite avanzar hacia una distribución más justa de los costos y beneficios del proceso de urbanización, así como disciplinar y reducir los efectos indeseados del mercado de suelo y avanzar hacia ciudades más equitativas y sustentables.
El curso ofrece una perspectiva crítica y propositiva sobre el catastro que necesitan las ciudades de hoy, destacando las oportunidades de contribuir a la gestión del suelo urbano y el financiamiento local. Presenta las bases conceptuales de los catastros, el estudio de métodos y técnicas de valuación masiva de inmuebles y analiza preguntas claves como: ¿Qué es y para qué sirve un catastro? ¿Cuál es la relación entre territorio, personas y derechos de propiedad? ¿Qué vínculo tiene el catastro con la gestión del suelo urbano? ¿Cómo se relaciona el catastro con los Sistemas de Información Territorial?
Relevancia
Los catastros son herramientas clave para la viabilidad de las políticas de suelo urbano, aunque su enseñanza tradicional no aborda en profundidad su relación con estas políticas. Los funcionarios catastrales se pueden beneficiar al comprender mejor cómo y cuánto el catastro puede ayudar al uso de instrumentos de gestión de suelo y en el estudio y modelización de los mercados inmobiliarios. América Latina presenta catastros en estados de desarrollo muy diferentes, con una amplia prevalencia de los llamados Catastros Fiscales o Económicos, por lo que se hace imperativo que la región avance hacia Catastros Multifinalitarios con un rol activo en la gestión del suelo urbano.
Appraisal, Assessment, Cadastre, GIS, Land Value, Legal Issues, Mapping, Property Taxation, Security of Tenure, Taxation, Tenure, Urban, Urban Development, Valuation
Course
Estrategias para Implementar una Valuación Masiva con Fines Fiscales
October 14, 2019 - November 15, 2019
Online
Free, offered in Spanish
Profesor: Marco Aurélio Stumpf González
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Descripción
El curso aborda temas relacionados con la valuación masiva de bienes inmuebles, desde una perspectiva fiscal, de manera de desarrollar una discusión con espíritu crítico sobre los fenómenos relacionados con el mercado inmobiliario, la tasación, la evaluación masiva, así como los recursos, técnicas e instrumentos de análisis económico y de avalúo fiscal.
Los participantes desarrollarán un análisis práctico basado de los diferentes métodos de valuación, donde podrán identificar las virtudes y deficiencias de los métodos de valuación en los sistemas catastrales de sus jurisdicciones.
Relevancia
Este tema está directamente relacionado con la eficiencia y justicia del sistema de financiación de los órganos estatales, con el fin de generar recursos económicos para el desarrollo de políticas públicas en beneficio de la población general.
Se evaluarán propuestas de cambios administrativos, legales y tecnológicos necesarios para la implantación de métodos de valuación en un sistema catastral multifinalitario, orientado al desarrollo de políticas de suelo que promuevan el desarrollo urbano, es decir, los elementos necesarios para construir un sistema catastral que pueda ofrecer avalúos fiscales en condiciones de justicia y eficiencia de tasación.
The annual conference of the International Association of Assessing Officers (IAAO) offers state and local assessing officials the opportunity to hear varied perspectives on property tax policy from eminent economists, academics, and practitioners who have a special interest in property taxation. Each year, the Lincoln Institute sponsors a seminar for conference participants on current issues in property tax policy. This year’s sessions will focus on “What Assessors Need to Know About Tax Abatements and Incentives.”
Details
Date
September 11, 2019
Time
2:15 p.m. - 4:30 p.m.
Location
Scotiabank Convention Centre 6815 Stanley Avenue Niagara Falls, ON Canada
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