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The Basis of the Property Tax

A Case Study of New Zealand and South Africa

William J. McCluskey and Riël C.D. Franzsen

July 2004, English

This report investigates the development of land and property taxation within the jurisdictions of New Zealand and South Africa. The research has sought to address a number of issues surrounding the basis of the property tax in terms of capital improved value, land value or indeed a combination. The choice of New Zealand and South Africa as the main case study countries was largely influenced by the fact that both jurisdictions have a historic usage of different property tax basis.

The report initially covers the main historical developments and provides for an outline of the current legislation affecting the basis of property taxation. The subsequent parts of the report deal with issues pertaining to valuation/appraisal methods, transaction data and the results of a questionnaire aimed at eliciting information of property tax basis. This latter section targeted valuers in South Africa and local government finance officers in New Zealand. The analysis contained in the report highlights and number of interesting aspects with reference the various systems used in both countries.