Monday, March 29, 2010

“Taiwan Minister: Progressive Property Tax Needs Further Study (Fox News)” plus 3 more

“Taiwan Minister: Progressive Property Tax Needs Further Study (Fox News)” plus 3 more

Taiwan Minister: Progressive Property Tax Needs Further Study (Fox News)

Posted: 28 Mar 2010 10:50 PM PDT

TAIPEI -(Dow Jones)- The proposal by Taiwan's finance ministry to introduce a progressive property tax requires further study, Minister of Finance Lee Sush-Der said Monday.

Deputy Minister of Finance Chang Sheng-ford told Dow Jones Newswires the government doesn't have a timetable for the introduction of the tax. The government had said it expected to introduce the tax as soon as next year.

"The economy is still recovering, so there is no time frame on any policy that may affect the pace of the recovery," Chang said.

Lee and Chang were speaking on the sidelines of a legislative session Monday morning.

The cabinet will hold a news conference Monday on the matter, said David Chen, a spokesman at the cabinet's Government Information Office.

Copyright © 2009 Dow Jones Newswires

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Property tax bill watered down to exempt farmers, small owners (The Nation - Thailand's English news)

Posted: 29 Mar 2010 12:25 AM PDT

 

The tax bill is planned to be submitted for Cabinet approval this week, following the collection of opinions from concerned state agencies such as the Budget Bureau, Interior Ministry and National Economic and Social Development Board. 

"Landlords are the target group of the property tax. We do not want the tax to affect farmers and low-income groups," said Lavaron Sangsnit, acting director of the legal division at the Fiscal Policy Office.

 

Graphic: Key points

1. Tax ceilings (revised every four years)

- Farm land: 0.05% of land value

- Residential land: 0.1% of value of land and building

- Others: 0.5% of value. Mostly concerning land for commercial use and unused land. After 3 years of idleness, unused land is subjected to double tax rate (but not exceeding 2 per cent).

- 0.1 per cent for land and building used as residential area.

2. No tax collection in the first two years, as appraisal on remaining 30 million land plots is undergoing. It serves as adjustment period of taxpayers.

They are subjected to 25% of tax amount in third year, 50% in fourth year and 75% in the fifth. Full enforcement is in the sixth year, after enforcement.

3. On exemption clause, the Cabinet would decide on the specific criteria later.

4. Land Bank Fund would be set up later.

Source: The Nation

Policy makers have limited the bill's coverage by exempting more people from paying tax, resulting in a watered-down version of the original draft, he said.

The bill sets ceilings on tax on three types of land: farmland (0.05 per cent of land value); residential land (0.1 per cent); and others including commercial shophouses and unused land (0.5 per cent). After three years of idleness, unused land is subject to double the tax rate (not exceeding 2 per cent). The rates will be revised every four years by the land tax committee, chaired by the Finance permanent secretary.

Finance Minister Korn Chatikavanij plans to propose that ministers expand the exemption clause to include owners of small parcels of land say 50 square wa or less and owners of condominium units of no more than 30 or 50 square metres. This is expected to benefit urban low-income groups. Condominium units are currently estimated to number 107,000 in Bangkok - 74 per cent of them less than 50 square metres in size and 60 per cent of them between 30 and 50 square metres.

The impact on average residential owners would be minimal, raising taxes slightly, according to Lavaron.  House owners currently pay virtually no Land and Building Tax or Land Development Tax - the two taxes to be replaced by the new property tax. Owners, however, would get better services from local governments under the plan, Lavaron said.

While tax burden on those who use land and buildings to do business, would be about the same, said Lavaron.

Land developers who accumulate land banks may need to change the way they do business, however.

"They just cannot stockpile vast land tracts for their property projects; they will need to do it wisely in order to avoid high tax costs," said Lavaron.

Property firms, however, are expected to pass their increased tax burden on to home buyers, leading to an expected rise in the price of new houses.

Landlords who previously bought large numbers of land plots, or received land through inheritance, are expected to face a sharp rise in taxes.

This led to Prime Minister Abhisit Vejjajiva's idea for a "Land Bank Fund," which would buy land from people who may not want to hold a large number of land plots. The government would redistribute the land plots to the poor.

Part of the property tax receipts would be used to finance the land bank scheme. The fund is expected to be under the supervision of Prime Minister's Office. The government would need to draft another law to implement it, said Lavaron.

The plan would give local governments more revenue to spend on local development projects, he said.

"The property tax is part of fiscal decentralisation, giving local governments freedom to spend their tax revenue," said Lavaron. Currently, local governments get a large portion of their funds from the central government, and do not much have freedom in how they spend it as they are required to implement certain policies directed by the central government.

According to the Fiscal Policy Office, combined local government revenue in 2008 was Bt376.74 billion, or 25 per cent of the central government's revenue. 

Breaking down the total revenue, local government revenue derived from land and building tax, land development tax, signboard tax and others was only Bt35.2 billion. 

Some officials expect the new tax will help to narrow the widening income gap between the rich and the poor in Thailand.

Finance Ministry spokesman Ekniti Nitithanprapas noted that the tax bill's main purpose is to improve land use. Replacing the two land-related laws, the new law will encourage better use of land, he said.

"The current conditions are unfair and encourage speculation. In the long term, if this law is effective, this may generate extra revenue for the government, but that is not our main purpose, at least in the near term," he said.

Some economists believe the property tax will lessen corruption, as people in local communities tend to pay more attention to what local governments do with their tax money, and do not perceive the funds used by the central government as being "their money".

 

 

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Christie looks to Mass. as model for property-tax cap (Courier-Post)

Posted: 29 Mar 2010 02:09 AM PDT

(2 of 2)

The result, Beckwith said, has been a dichotomy: "In affluent communities, the property taxes have increased at a higher level. In poor communities, they cut the services more."

"You create long-term winners and losers," he added.

New Jersey Democrats have suggested several ways to make up the difference, including allowing cities to charge local sales tax and reinstating a surcharge on people making more than $400,000. Christie has adamantly said he'll veto both, in keeping with his no-new-taxes campaign pledge.

New Jersey already has a property tax cap. In 2007, Democratic Gov. Jon Corzine managed to get a 4 percent cap through the Legislature, but there were exemptions for everything from increases in pension payments and health care costs to pay raises. A recent analysis by The Star-Ledger of Newark found that one-third of towns exceeded the cap last year.

Christie's proposal would provide no exceptions -- just like Massachusetts.

"If these cuts go through the way they are and they impose a hard cap, the only thing I see is Draconian cuts in personnel and services," said Bill Dressel, executive director of the New Jersey League of Municipalities.

Barbara Anderson, whose group Citizens for Limited Taxation helped spearhead the Massachusetts law, said the measure has done more than keep property taxes down there. It has given power back to the people.

"It's as much an issue of power and control as it is a money issue," Anderson said. "Taxpayers do get treated a lot better by local officials than they used to. School boards aren't as arrogant as they used to be because they know they might have to ask for money."

But there have been sleights of hand.

In Massachusetts, homes were reassessed to allow for the higher taxes. But when home values plummeted in the housing crisis, the values were never reassessed to reduce taxes.

A 2004 University of Maine study found Massachusetts municipalities dealt with the cap by protecting spending on police, firefighting and sanitation, but cut spending for schools, parks and libraries.

It also found property tax increases in California have been quelled by that state's 1 percent cap enacted in 1978. California had to increase other taxes to pay for services, including the sales tax and taxes on beer, wine, gasoline and cigarettes, the study said.

A 2006 study by Americans for Tax Reform, an anti-tax group whose numbers Christie used for his speech, noted that had the Garden State implemented the same tax cap as Massachusetts that year, New Jerseyans' annual per-capita tax burden would have been $4,200 instead of $6,000.

New Jerseyans would undoubtedly love to have the 33rd highest property taxes in the country. But most would settle for being anything besides No. 1.

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Property Tax Appeals (WILX 10 Lansing)

Posted: 29 Mar 2010 12:33 AM PDT

Many Michigan residents seeing lower tax bills after their homes' value fell significantly last year are now going before local tax appeal boards to argue that they deserve even more tax relief.
The overwhelming majority of Michigan homeowners will get a tax cut this year because their home prices and, in most cases, their taxable values sank in 2009.
But many are asking for even steeper reductions, often by comparing their home to a nearby home that recently sold.
The Detroit Free Press sent three reporters to visit several boards of review to hear what these homeowners were saying and what review board members said in response.
In Troy, homeowners got instant answers from the local tax appeal board after give-and-take and questions from the board members.
Mike Kowalski, a laid-off auto engineer turned real estate agent, came armed with compelling numbers when he had his 10 minutes with the Troy Board of Review.
He noted in his pitch to the board that his home has the original carpet, his cabinets are from 1983 and his in-ground pool is 24 years old. Kowalski compiled statistics on comparable properties right down to the value per square foot.
"I'm the guy with one of the smallest colonials in the sub," he told the board. "I don't feel that's a bona fide reason to overassess me."
Kowalski succeeded in his appeal and the board reduced the value of his home $15,000 to $271,000, which will reduce his tax bill about $260 a year.
"I guess you can fight City Hall," he said after winning the reduction.
Others didn't get quick answers.
Jacquelyne Carter was shocked when she received an assessment notice valuing her five-bedroom home in Southfield at $102,000 just a few weeks after she paid $80,000 for it. That will cost her about $600 more each year in taxes than she had budgeted.
She took her case to the Southfield Board of Review.
"I asked them to make it at least what I paid for it," she said. "I'll go to the tax tribunal if I have to."
Rafik Quteibi was optimistic that his taxes would be lowered after meeting with the board of review in Shelby Township.
Quteibi came well prepared, handing board members a 2-inch-thick pile of assessments of houses in his neighborhood.
Five houses of comparable or larger size were valued below the $240,000 that township officials said his 3,258-square-foot brick house was worth.
"You really did your homework," a board member said.
Quteibi left with his arm around his girlfriend. He hopes to raise a family in his large brick home.
"I'm going to get married soon, and I think this is the perfect location. I just think the appraisal is too high," he said.

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