Towards a more effective use of land: combining planning and fiscal powers

The paper sets out key challenges for spatial planning in the twenty-first century—with a particular focus on the quest for making the most effective and efficient use of land, in order to ensure sustainable urban development. In doing so, it provides an international comparative analysis, exploring the potential steering of development through fiscal powers—complementary to planning powers and instruments in Germany and Brazil. In this context, it addresses some of the apparent weaknesses in the context of statutory planning. Fiscal instruments can contribute to an effective steering of spatial development, a feature not yet actively exploited in Germany. This paper analyses the municipal and state options to enhance its land tax (Grundsteuer) regime, drawing from the Brazilian municipal property tax example and exploring the potential for adaptation. In Brazil, the constitution explicitly defines the property tax as an instrument for spatial planning. Research into problems and success factors of this Brazilian model of land development are rare and don’t exist in the international discourse. This research analyzes important elements to be considered in any tax reform aiming to increase environmental protection through sustainable development of urban areas. It therefore contributes to the international theoretical discourse of planning and fiscal law and also has relevance for planning practice, particularly for decision makers.