Property Taxes for Development: Building the Foundation for Accelerated Subnational Development

Property taxation is the foundation for effective sub-national financing and has substantial potential to raise stable revenue, improve equity and economic efficiency, support state-building, and strengthen the social contract. However, property taxes are the most underperforming major tax type across lower-income countries, owing to incomplete property registers, weak valuation, inadequate IT systems, low compliance, ineffective inter-institutional collaboration, limited public trust, all significant political and administrative resistance to reform. More optimistically, recent reform experiences demonstrate the potential for rapid improvements through fit-for-purpose approaches that simplify administration, leverage locally appropriate technology, and build trust and political support for reform. Scaling and sustaining success will require continued efforts to document, test, and share proven approaches, and to develop and deploy diagnostic tools that can support governments in identifying context-specific reform challenges and tailoring their reform strategies.