Template-Type: ReDIF-Paper 1.0
Author-Name: Suzi Kerr
Author-X-Name-First: Suzi
Author-X-Name-Last: Kerr
Author-Email: suzi.kerr@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research
Author-Name: Andrew Aitken
Author-X-Name-First: Andrew
Author-X-Name-Last: Aitken
Author-Email: andrew.aitken@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research
Author-Name: Arthur Grimes
Author-X-Name-First: Arthur
Author-X-Name-Last: Grimes
Author-Email: arthur.grimes@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research
Title: Land Taxes and Revenue Needs as Communities Grow and Decline: Evidence from New Zealand
Abstract: New Zealand is unusual in that nearly 60% of local services are funded from property taxes. These are a mixture of land taxes, capital value taxes, annual rental value taxes and uniform general charges. We explore the efficiency and equity of this system at both national and local levels. We find that the national property tax base is large relative to spending needs but that the variance in per capita tax bases across territorial local authorities is probably greater than is efficient or equitable. We find that land taxes are more progressive than capital value taxes. Our research also addresses local authorities' ability to provide services as their property tax base changes as a result of external economic shocks. We consider the occurrence of and responses to "fiscal stress" in a system of local government that is heavily dependent on property taxation. We provide some examples of the wide range of actual responses by local councils faced with similar population changes. Finally, we offer some tentative conclusions and implications both for New Zealand local public finance and for the use of property taxes, and particularly land taxes, more broadly.
Length: 50 pages
Creation-Date:  2004-01
File-URL: https://motu-www.motu.org.nz/wpapers/04_01.pdf
Number: 04_01
Classification-JEL: H23; H73; H71
Keywords: New Zealand, local government, property taxes, land taxes
Handle: RePEc:mtu:wpaper:04_01