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Mexico: Failure of the Traditional Property Tax and Proposed Beneficial Property Tax Alternative

In: Beneficial Property Taxation for Emerging Market Countries

Author

Listed:
  • Ehtisham Ahmad

    (London School of Economics and Political Science)

  • Giorgio Brosio

    (University of Torino)

Abstract

Mexico has had a US-style ownership-valuation model property tax for a very long time, with a betterment levy, but collections are poor, and the betterment levy is dysfunctional. A significant portion of the revenues are generated in the large metro areas, particularly Mexico City. Value capture mechanism in Mexico City has improved the historical center but pushed the informal sector further into the urban sprawl, extending into the State of Mexico. The disparities in revenue generation are reflected in the service delivery differentials with respect to lagging regions. This leads to continued migrations to the metro areas, and Mexico City is sinking—almost as fast as Jakarta—and cannot take more migrants. As in the Chinese case, simulations show that a beneficial property tax could raise revenues quickly, and anchor more effective local service delivery and access to private finance to support a sustainable growth strategy to complement the connectivity investments aimed at the lagging Southern States.

Suggested Citation

  • Ehtisham Ahmad & Giorgio Brosio, 2022. "Mexico: Failure of the Traditional Property Tax and Proposed Beneficial Property Tax Alternative," Springer Books, in: Beneficial Property Taxation for Emerging Market Countries, chapter 0, pages 93-115, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-08612-0_5
    DOI: 10.1007/978-3-031-08612-0_5
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