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Australia’s Future Tax System (2009) among its recommendations identified the need for realignment of tax revenue across the tiers of government in Australia, as well as the need to raise additional revenue from land-based taxes. In achieving these objectives, this paper aims to examine the revenues generated from land and how capital gains tax may be reconceptualised as a value capture tax resulting from the rapid urbanisation of Australia’s cities. The development of a theoretical framework realigns the emerging rationale of a value capture tax, as a means for revenue to be divested from central government in the form of capital gains, to sub-central government as a value capture tax.

A qualitative research methodology comprising grounded theory and phenomenological research is used in undertaking the review of tax revenue collection from state land tax, conveyance stamp duty, local government rating and Commonwealth capital gains tax. Grounded theory is applied for constant comparison of the data with the objectives of maximising similarities and differences in these revenues with an analytical construct as defined by Strauss and Corbin (1990, p. 61).

The paper finds that realigning revenue from land-based taxes against the principles of good tax design provides greater opportunity to raise additional revenue to fund public infrastructure while decentralising revenue from central government. It provides an alternate mechanism for revenue transfer from central to sub-central government while conceptually improving own source revenue from value capture taxation as a new revenue source.

The limitation of this paper is the ability to quantify the potential increase that would be generated in the form of value capture revenue. It is demonstrated in the paper that capital gains tax took over 15 years for revenue generation to crystallise, a factor that would likely occur in the potential introduction of a value capture tax for funding transport infrastructure.

The pathway to introducing a value capture tax is through re-innovating capital gains tax as a value capture tax directly hypothecated to funding transport infrastructure that results in the uplift in values of the surrounding property from which revenue is raised.

This paper provides a new approach in contributing to funding the capital outlay of public infrastructure in lieu of central government consolidated revenue allocated through the Commonwealth Grants Commission. It provides a much-needed approach to decentralising revenue from the Commonwealth to sub-central government in Australia which has one of the most centralised tax systems in the OECD.

This study examines the effectiveness of passive value capture mechanisms as an effective form of mechanisms in funding infrastructure from an Australian perspective. The lukewarm response of active value capture mechanisms such as betterment levies in Australia is also discussed.

A case study of the Sydney Metro City and Southwest (SMCSW) project in Sydney is used to illustrate passive value capture mechanisms.

Unlike many developed countries, passive value capture mechanisms have been adopted in Australia. This approach is an effective form of value capture mechanisms to capture the value uplift to offset the total development cost of the SMCSW project. However, this approach is highly sensitive to property transaction activities that could be affected by the general economic conditions and unprecedented events such as the COVID-19 pandemic. Further, there is a widespread discussion of the efficiency of land tax in New South Wales (NSW) in capturing all properties subject to the value uplift. Consequently, a shift towards a broad-based land tax is recommended in which it would provide a more efficient way of infrastructure funding.

Policymakers should consider a broad-based land tax for residential and commercial properties in order to improve the efficiency of passive value capture mechanisms. This also highlights property valuers should play a greater role in the development of broad-based land tax system.

Previous studies have extensively demonstrated property value impacts of transit investments; very little research assesses the growth of value capture funding mechanisms, particularly passive value capture mechanisms. Specifically, this paper is the first paper to assess the effectiveness of passive value capture mechanisms.

The purpose of this paper is to provide an understanding of how a phenomenon or process of collective action with regard to the negotiation in value capturing can be expected to happen in a certain way, which in the end could improve our understanding of value capturing implementation processes.

Game theory is utilized to model the structure of relations between the actors involved. Game theory is a mathematical approach to study collective decision‐making situations in which the decision makers involved have conflicting preferences. Here, the authors consider the implementation of value capturing as the result of an agreement between a municipality and landowners to contribute to the costs of public infrastructure development which, in essence, is a form of collective action.

The paper is not only demonstrating the usefulness of game theoretical modelling in conceptualising relations between different stakeholders in the implementation of value capturing and suggesting the best possible strategy for every stakeholder; but also observing the limitations of the methods in analyzing the behaviour of actors involved in decision‐making processes with respect to value capturing.

Unlike most of value capturing studies which focused on either a valuation point of view (how much value can be captured?), a governance or instrumentalist point of view (which instruments can be effective for value capturing?), or a political point of view (to whom belongs the increment value that is the result of government investments or decisions?) – this paper emphasizes an alternative perspective to value capturing, namely the decision‐making or negotiation process underlying value capturing by relying on game‐theoretical approach.

Value capture seeks to generate revenue by extracting a portion of the gains in the value of land and property that result from improvements to transportation networks. The paper aims to present the opportunities for facilities management (FM) on the level of participating more actively in the development of new area to help building a competitive and healthy area with high quality for residence, business and spare time. A framework also includes life period land valuation in the land value capture (LVC) for the assessment and revenue models for public private partnership (PPP) type of investments in the way to identify additional private profit so as to attract landlords to join the project.

Land valuation for expropriation is a useful method, which can be evaluated through the life period of the infrastructure. The value capture strategies are identified and respective policies are evaluated. Periodically, market value assessment of land within the value capture model is designed, by which the private partners could be attracted.

In the paper, LVC shows how the relation to increase value of land can bring competitive areas and as such give new opportunity for FM.

Capturing land value and widening the internalisation of external positive impacts enhances the perspective of project assessment and PPP financing models. This model may be used by public and private sector parties involved in PPP arrangements to improve project evaluation and the base of project finance.

Hong Kong and Singapore are characterized by rapid economic development and a high population density of 6,250 and 6,055 per km² land respectively. Land revenue is their major source of income to finance their public infrastructure and social services. Their design and collection of taxes on land, their value‐capture instruments and their allocation of revenue for public works are examined. The article finds that there are some similarities between the two cities in capturing land value, such as the collection of annual rates and stamp duty on property. The differences include the adoption of property tax surcharge and the development charge. In fact, each mechanism has its pros and cons. The method and the extent of each mechanism depend on the goals of the government in respect of the social and economic conditions.

The theoretical case for land value capture is well-known, but the effectiveness of affordable housing delivery as a capture mechanism is not so well-documented. Building on the earlier theoretical and empirical work of Whitehead (1991, 2007) and Crook and Whitehead (2002), the purpose of this paper is to consider the provision of affordable housing from a land value capture viewpoint, focusing on the process by which the amount of affordable housing is determined between landowners/developers on the one hand and local planning authorities on the other.

The paper adopts a mixed-mode approach for the data collection. Two surveys of local planning authorities were undertaken, together with a series of case study interviews.

The paper evaluates whether land value capture has been an effective mechanism for delivering affordable housing by focusing on three principal areas: first, the political agenda in relation to land value capture and the supply of affordable housing; second, the nature and motivation of the stakeholders involved in affordable housing decision-making; and third, the use of economic models as decision tools for determining the amount and type of affordable housing are negotiated.

The research provides some insight into the effectiveness of local authority affordable housing targets as a means of capturing the uplift in land value that results from the grant of planning permission.

This paper aims to compare and review alternative ways to adjust public ground leases.

Based on principles derived from a review of scientific literature, alternatives for the extension of leases are discussed based on the case of Amsterdam.

Many alternatives lead public ground-lease systems to produce results that are the opposite of what they are intended to be (as inspired by Henry George): new improvements result in higher rent, but additional location values do not result in higher rent. One exception is the lease-adjustment-at-property-transaction alternative, which may nevertheless result in fewer transactions.

Public leasehold systems are highly contested with regard to the extension of leases. Such systems are often aimed at capturing land-value gains. In practice, however, this tends to be more difficult than expected. Value capture by authorities, as intended by the system, results in counter-movements of lessees, who often gain public support to set lower leases. These political processes may even result in the termination of such public ground-lease systems. This paper reports on a search for possible solutions.

The comparison of various alternatives to ground-lease extension based on principles derived from literature is new, and it contributes insight into public ground-lease systems.

The purpose of this paper is to review the issues involved in land value taxation and betterment and the issues involved in apportioning value between land and improvements.

The theoretical and valuation issues in betterment are reviewed and a case study of a betterment tax introduced in the UK is used to illustrate the practical problems in implementation.

The idea of land value taxation depends upon being able to apportion property values between land and improvements. This raises both theoretical and practical problems that are difficult to overcome.

The apportionment property values between land and improvements produces results that cannot be verified by market evidence, suggesting that an alternative approach be adopted through value-based recurrent property taxes revalued at frequent intervals.

Much of the literature has concentrated on the theoretical advantages of land value taxation rather than examining the practical problems of implementation. These suggest a different approach with less emphasis on betterment taxes and more on how recurrent property taxes can be an effective instrument for value capture.

The purpose of this paper is to explore how Monte Carlo Simulation (MCS) could have enhanced understanding of the risks involved in the financial strategy for revitalization of Rio de Janeiro’s central city based on the capture of value generated by government interventions.

The study first describes the process involved in developing the financial strategy and model without MCS. Then, it shows how the MCS could have been integrated into this process and evaluates its potential impacts on the quality of risk analysis.

If MCS is fully integrated into the decision-making process, it can serve as a heuristic tool that helps team members to better understand risks by generating forecasts of land value and other variables as a probability distributions. By showing the variance of the forecasted variable, MCS integrates elements of modern risk analysis into financial model development in a cost-effective manner.

MCS covers only the risks associated with the variables in the financial model. Events that seem extremely unlikely (i.e. “black swans”) can occur and must be assessed separately.

MCS can help analysts to understand the financial risks of large-scale development projects involving value capture, even in the prefeasibility stage.

By facilitating value capture, MCS could help close the financing gap for sustainable urban development and subsidies for lower income families.

The study “retrofits” MCS on a successfully completed financial prefeasibility study to assess its usefulness as a heuristic tool.

This study aims to evaluate the property tax base under the local government property taxation in Nairobi City and its implication on revenue adequacy of the city. Nairobi has grown both in population and in physical extent resulting to increased demand for urban services. The city faces challenges of adequate infrastructure service provision against increasing demand. Property taxation if fully exploited can be a major source of city government revenue, which has been dwindling.

Literature review of property tax bases in the world and examination of best practices was done to highlight the inadequacies of property tax base administration in Nairobi. Primary data were gathered through interviews of officers in Nairobi City involved in the land rating process. Secondary data were obtained through documentary search and field survey of the study area.

The study established that Nairobi relies on a dual system of taxation, namely, site value rating and area rating. Tax is on vacant land only and excludes improvements. There are many legal exemptions and administrative exclusions from the tax base. The property tax registers do not include all the taxable properties and there is no regular updating of the tax registers. Nairobi relies on an outdated valuation roll whose values have no relation to the current market values.

These factors have resulted to a narrow tax base, which affects the revenue potential of the city and its ability to adequately provide infrastructure services.

This is an original research, which relied mainly on primary data. To establish the property tax bases and the exempt properties in Nairobi, the researchers interviewed the officers at the Nairobi city land valuation and property management directorate using structured questionnaires. To address the third objective on whether the property tax base is complete and all-inclusive, the research relied on primary data. The research population was residential properties in Buruburu, Kilimani and Riruta areas of Nairobi city. The sample data on property details were collected from the Ministry of Land and Physical Planning (MLPP). The researchers then examined the records at the Nairobi City to evaluate whether the properties, which are registered at the MLPP, are charged land rates at the city level and at what amounts. This included properties under site value rating and area rating.