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This study aims to present the findings from a series of case studies that examine the problems faced by countries seeking to introduce value-based recurrent property taxes to replace the ones levied on the basis of area or inventory value. It identifies that two of the most significant barriers are the absence of comprehensive list of taxable properties and inadequate data on transaction prices. Both of these can be overcome with sufficient resources, but this raises the question as to why governments are reluctant to do so, in spite of the advantages of such a change.

The paper makes particular use of case studies of Moldova, Poland, Serbia and Turkey, which have explored the potential of introducing value-based recurrent property taxes and the issues they have faced. The case studies have been produced by participant observers who have had the opportunity to examine developments over long periods of time. The case studies are set against a wider statistical analysis of the role of recurrent property taxes in tax systems.

Putting in place comprehensive systems for registering properties and recording their characteristics and systematically collecting data on transaction prices require significant investment over a long period of time. This requires commitment on behalf of governments. Governments may be reluctant to support this because of the opposition such reforms can face unless confronted with compelling fiscal or external pressures to act.

The issues identified are the ones that many countries seeking to introduce value-based recurrent property taxes will face and puts forward how they can be tackled. The case study countries are middle-income ones with relatively well-developed infrastructure, which low-income countries may lack.

The solutions to overcoming the barriers to value-based recurrent property taxes encountered in the case study countries are the ones that are applicable to many other countries, who can learn from their experience.

The paper provides a perspective on overcoming the issues encountered in introducing value-based property taxes from the viewpoint of those who have been involved in working out ways of overcoming them and so provides insight that is a useful addition to the literature.

This paper aims to report the findings of a study of nine countries in Europe and Central Asia (ECA) that have either recently introduced or are working towards the introduction of value-based recurrent property taxes. Although many countries have recurrent property taxes, often, they are not value-based and raise relatively little revenue. This paper examines the barriers to the introduction of value-based property taxes and discusses how they can be overcome.

Case studies of recurrent property taxation were undertaken for eight countries from the World Bank’s ECA region. The sample included countries at different stages in the development of value-based property tax systems. A ninth country, The Netherlands, which has a well-developed mass valuation system, was included for comparison.

Barriers to the introduction of value-based recurrent property taxes are technical and political or governance ones. The technical barriers include the comprehensiveness of property registration, the quality of transaction price data, the extent to which the valuation infrastructure meets internationally recognised standards and the quality of tax collection systems. The principal political and governance problems are the unpopularity of property taxes, the need to convince the public that they are fair and the lack of champions of property taxation in government.

The case studies are drawn from the ECA region, but the issues raised apply in many other parts of the world. A case study approach produces rich data for each example that enables key issues to be explored in depth.

The study has identified issues and ways of approaching them that are relevant to countries seeking to introduce value-based recurrent property taxes so that they can learn from the experience of others.

The approach has enabled a systematic comparison between countries so that common experiences and issues are identified.