Determinants of Property Tax Revenue : Lessons from Empirical Analysis

Many developing countries have struggled with realizing sufficient revenues from propertytax. However, as developing countries experience economic growth, they are also seeing property values rising,providing a bigger tax base from which to realize revenues. Technology has made tax administration easier and moreeffective and developing country governments have been improving their quality of governance and consideringintroducing or enhancing property tax revenue collection to diversify their tax and fiscal revenues. This paper exploresthe determinants of property tax revenue using data from the United States, Canada, Australia, Chile, and theOrganisation for Economic Co-operation and Development for 2006 to 2016, using a fixed effects model. The results showthat increases in gross domestic product and population lead to increases in property tax revenue and an increase infederal transfers decreases it. The outcomes of the empirical analysis highlight the statistically significantimpacts on property tax collection of a country's state of development and its demographic, fiscal, and propertytax–specific characteristics. A critical question for further research is whether and how the empiricalmethodologies and specifications as applied to the set of developed economies would be replicated in the context ofdeveloping countries.