Property taxes are a necessity for many cities and districts as they fill their budget and allow governments to redirect funds to other essential areas. However, for many owners, the assessment of the property’s value on which the tax is based is unfair. The government should consider not only the current value of the property in the area and state of the evaluated object but also the term of ownership to distribute taxes equitably.
The current property assessment system is based both on the value of the object and the area in which it is located, and the government also offers discounts for low-income owners (Martin and Beck, 2016). This decision, at a glance, is suitable; however, the gentrification of areas can significantly raise the value of a property. According to Martin and Beck (2016), the process of improving and modernizing neighborhoods substantially increases the cost of houses. This trend is unfair, since some families who have lived in the house for generations are forced to leave it because they cannot afford to pay new taxes.
Consequently, the government should also introduce a system of benefits for citizens, depending on the duration of the property-owning. Besides, according to Kim (2017), the introduction of a system in which taxes are levied only in certain areas with additional services may be more profitable than general taxation. If tax cuts are needed, this approach may be appropriate for maintaining the revenue streams. Another way is increasing or the introduction of taxes on environmental pollution; for example, houses using solar energy will have to pay less.
Thus, the state should use the current assessment system and also add to it the possibility of obtaining benefits for a long duration of ownership. This change contributes to fair taxation and long-term use of property, since people will be interested in an excellent state of their houses or territories and their long exploitation. At the same time, redirection of the tax payment sector contributes to the improvement of the environment and preserves government revenue.
References
Martin, I. W., & Beck, K. (2016). Gentrification, Property Tax Limitation, and Displacement. Urban Affairs Review, 54(1), 33–73.
Kim, Y. (2017). Limits of Property Taxes and Charges: City Revenue Structures After the Great Recession. Urban Affairs Review, 55(1), 185–209.