IPTI | President’s Message – November 2025

The Tax Foundation has recently published an article titled “There’s No Good Way to Pay for Property Tax Repeal” which is another contribution to the current debate in the USA over whether property taxes can be abolished. Written by Jared Walczak, Vice President of State Projects, the key findings are stated by the author to be:

• Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax
• Replacing the property tax with newly granted local taxing authority is exceedingly difficult, because local sales and income tax bases vary widely across jurisdictions; there may, for instance, be no feasible sales tax rate by which an agricultural county or bedroom community could replace its property tax
• Backfilling forgone local property tax revenue through new state taxes is difficult because it dramatically shifts overall tax burdens, undermines local accountability, and cannot easily adjust for changing population
• All revenue alternatives are less conducive to economic growth than the existing property tax regime, but some transfer regimes are sharply
• Taxpayers should have the opportunity to evaluate plans for replacing property tax revenue, not just promises of repeal without trade-offs.

In the report’s “Introduction”, the author states: “The property tax will never win any popularity contests. Economists hold it in high regard, but, perhaps relatedly, economists are not terribly popular either. It’s one thing, however, to favor property tax repeal in the abstract: many Americans are clearly for that. But with which taxes should it be replaced, and how will the overall package of property tax replacement be received?

Some proponents of property tax elimination wish to postpone this conversation, advancing ballot measures that repeal property taxes and charge the legislature with working out minor details like how to replace the lion’s share of local tax revenue. The only responsible way to consider property tax abolition, however, is to grapple with the alternatives.

There are many good arguments for reforming rather than replacing property taxes, arguments we have advanced elsewhere. This analysis, however, largely sets those issues aside and simply asks: if not the property tax, then what?

Replacing the largest source of local tax revenue is no easy task. It is rendered still more difficult by the necessity of replacing current revenues – or some substantial percentage of them – in each taxing jurisdiction, since alternative revenue streams have different geographic distributions. Even if a high-rate local sales tax were able to offset property taxes in a community dominated by retail establishments, for instance, it would be woefully inadequate to the task of replacing revenue in a bedroom community or in farm country.

New statewide taxes create their own distributional challenges. Once the property tax and its apparatuses (including assessments) vanish, how should revenues be allocated to cities, counties, and other local jurisdictions in future years? Should a replacement funding mechanism be based on each jurisdiction’s prior year collections, in essence subsidizing higher-tax jurisdictions with state funds in perpetuity? Or should funding be equalized by population or a formula estimating a jurisdiction’s needs, yielding vastly different distributions than exist at present?

Additionally, as communities evolve both in population and economic status, how would state funding adjust? Stripped of the property tax as an anchor, could lawmakers design a local funding system without an inadvertent incentive structure that stifles growth and rewards fiscal mismanagement and economic stagnation?

This paper examines a range of options, with sample calculations and discussions of trade- offs. The unavoidable conclusion: every possible replacement option has a host of problems that would render it undesirable to most taxpayers. Doing away with the property tax may be popular. Replacing it won’t be.”

Moving on to the report’s “Conclusion”, the author states: “Given the pitfalls of each possible approach to property tax replacement, it is unsurprising that many advocates of repeal want to defer deliberations on a replacement until after the property tax’s abolition is approved. But that is no excuse. Every policy choice involves trade-offs, and for a policy change as radical as property tax elimination, it is irresponsible to consider repeal separately from proposals to replace the forgone revenue.

Proponents of property tax repeal should be having frank conversations about which taxes would replace it, what rates would be necessary, and who would pay more. They should have a plan for how the replacement revenues would be allocated, and how adjustments would be made in future years. And they should grapple with the incentive structure created by a system in which local governments may no longer control their own revenues, and where expenditures may be independent of the tax costs of those decisions, which could be socialized across all taxpayers, regardless of where they live.

Repealing the property tax is an aspiration, not a plan. If proponents of property tax elimination have plans for how to replace it, voters should have an opportunity to evaluate those plans in advance. And if they don’t have a plan, voters should know that too.”

The report, which contains lots of useful information and analysis, is available via the link below:

https://taxfoundation.org/research/all/state/property-tax-repeal-replace-revenue/

Time now to move on to IPTI matters. I have just returned from our annual Caribbean conference which, I am pleased to say, was a great success. Held in St Lucia in partnership with the Royal Institution of Chartered Surveyors (RICS) and in cooperation with the Institute of Surveyors in St Lucia Inc. (ISSL), we had 175 attendees from both across the region and around the world. We had generous sponsorship to support the event and our sponsors not only had their own booths at the conference, but some also kindly donated raffle prizes which went down well – particularly with those who won them!

We changed the format of the conference this year with a greater focus on discussion panels

– which the audience liked – and not having the parallel breakout sessions we have used in the past. The new format seemed to work well and we are likely to repeat it next year when the conference will be held in Kingston, Jamaica on 4-5 November 2026. As readers will be aware, Jamaica has just suffered a major hurricane (Melissa) so we hope that the island will have fully recovered by then. Our thoughts are with all those in the Caribbean who have been affected by the storm.

At the end of October, we held an online meeting for corporate representatives on the topic of “Recent Developments – Legislative Changes and Court/Tribunal Decisions”. This discussion group focused on recent developments of interest, including legislative changes and key court or tribunal decisions. IPTI Board Member David Wilkes provided a short presentation to set the stage. This was followed by an open discussion where corporate managers shared notable updates and insights. With so many important developments to review, this was an engaging and valuable session.

More information about forthcoming events – including conferences, symposiums, webinars, workshops, etc. – is available on our website: www.ipti.org.

Now it’s time for a quick look at what is making headlines concerning property taxes in selected jurisdictions and countries around the world. For more information, and links to the original news articles, please refer to IPTI Xtracts which can be found on our website: https://www.ipti.org/ipti-xtracts

Starting in Canada, there was an interesting news report about a property tax appeal in British Columbia where a Vancouver property owner may have used artificial intelligence (AI) to argue for a lower tax assessment. The property was assessed at over $19 million and the owner sought a 20% reduction in the valuation. However, the Property Assessment Appeal Board of British Columbia said that the owner breached its code of conduct as he may have used AI to make his argument. The code forbids submissions that are inaccurate, misleading, or manipulated and in the recent decision the Panel Chair stated: “The appellant’s submission includes quotations from legal case citations that do not exist”. The Chair went on to state: “It is possible that these may be ‘hallucinations’ from using generative artificial intelligence to assist with developing the appellant’s submission. If so, this might indicate a lack of care and attention to detail. A worse alternative is that the submission has been purposely falsified with knowledge and intent.” In making his arguments for a lower assessment, the owner quoted three decisions from the board and B.C. Courts “that support a 20 per cent downward adjustment based on market resistance,” said the decision. “However, the assessor points out that none of the cited cases can be found on the (Canadian Legal Information Institute) or board websites.” The Chair continued: “Furthermore, regarding the apparent fabrications in the appellant’s submissions to the board, I also invite further submissions regarding the potential for ordering costs against the appellant in favour of the assessor, the board, or both, which I will decide in a subsequent decision.” An interesting sign of the times!

Moving on to Greece, the deputy finance minister referred to real estate taxes at a recent conference. He outlined new government interventions aimed at creating a favorable environment for real estate investments, while prioritizing affordable housing, during remarks at the Athens Conservatory. He said the real estate sector remains a dynamic part of the Greek economy, contributing to job creation and attracting investments. He added that the codification and simplification of legislation has had a positive impact, noting the recent passage of the new property tax code, which he said brings order to previously complex real estate laws. “The government supports investments in real estate, while also addressing the many challenges, such as affordable housing,” he said. He added that this goal is supported by a series of recent tax interventions announced by the Prime Minister at the Thessaloniki International Fair and included in the tax reform bill, which will soon be submitted to Parliament. He referred in particular to the introduction of an intermediate tax rate on rental income and the extension of a three-year tax exemption for long-term leases of previously closed properties or conversions from short-term to long-term leases.

In Cyprus, recent news reports state there are compelling reasons why the property sector should be subject to greater taxation and, moreover, should be a key part of the forthcoming tax reform. Firstly, the reports indicate, in view of mounting future demands for government spending Cyprus will need to have a sustained increase in its government revenues through a broadening of the tax base. And property taxes are the obvious candidate for broadening the tax base since they are at a very low level in Cyprus as well as being according to fiscal experts and the IMF the least “growth-unfriendly” of taxes. Secondly, annual progressive taxes on property wealth and incomes would contribute importantly to reducing the rising wealth and intergenerational inequalities prevailing in Cyprus. Thirdly, the low level of taxes on the property sector – compared with many other countries – is stimulating a strong foreign demand for Cyprus real estate, particularly for “luxury” apartments that, in turn, is pricing and crowding out many domestic residents, particularly younger persons, from the housing market. Fourthly, the very high and mounting demand for Cyprus properties together with very generous tax incentives for property developers is diverting resources away from investments in other, potentially more productive, sectors of the economy such as in expanding and renovating facilities for education and the care economy. And, fifthly, excessive property development fuelled by a benevolent tax regime is said to be ruining the natural environment of Cyprus.

In New Zealand, Hurunui property owners will soon receive a Notice of Rating Valuation in the post, containing an updated rating value for their property. The new rating valuations have been prepared on behalf of Hurunui District Council by outsourced contractors. They show the district’s total rateable value is now $10,717,916,350, with the land value of those properties now valued at $6,743,951,300. Rating valuations are usually carried out on all New Zealand properties every three years to help local councils set rates for the following three- year period. They reflect the likely selling price of a property (excluding chattels) at the effective revaluation date, which was 1 July 2025. On average, the value of residential housing in Hurunui has increased 1.5% since the previous effective revaluation date of 1 July 2022. The average home value is now $634,967, while the corresponding average land value has increased 3% to $276,318. Commercial property values have marginally increased by 1.8%, while industrial property values have risen by 9.4% since the last rating valuation in 2022. “The industrial sector continues to benefit from low vacancy rates and rising rental levels,” a spokesperson said. “Commercial land values have decreased by 4.7%, while industrial land values have increased by 4.1%.” Since 2022, the average capital value of a lifestyle property has increased by 3.6% to $845,835, while the average land value has marginally decreased by 1.5% to $402,616. The updated rating valuations are independently audited by the Office of the Valuer General and must meet rigorous quality standards before they are certified. They are not designed to be used as market valuations for raising finance with banks or as insurance valuations. I am pleased to add that the Valuer General of NZ is a Member of IPTI’s Board.

In the UK, there is increasing concern over what the Chancellor of the Exchequer may decide to do in relation to property taxes in her Budget which is due to be announced on 26 November. A large number of news articles relate to possible changes to capital gains tax (a tax paid on the disposal of properties), stamp duty (a tax payable by property purchasers based on the price paid to buy a property), council tax (the annual property tax payable in respect of residential properties) and non-domestic rates (the annual property tax on business properties). On council tax, the Scottish Government has recently launched a consultation on reform of the tax and the Welsh Government is conducting a revaluation. The government has yet to announce what, if anything, it is going to do about the council tax system in England which, as I have said many times in this newsletter, is unfair, regressive and unjustifiably out date – the banded capital values are tied to a valuation date of 1 April 1991! With regard to business rates, the UK government has given itself powers to introduce both higher and lower tax rates (called “multipliers”) along with a revaluation due to come into effect in April 2026. A recent report shows that 16,780 properties across England are above the rateable value limit of £500,000 which may be affected by an increase to business rates if Chancellor Rachel Reeves goes through with planned reforms, having a material impact on occupiers and investors. The analysis indicates that business rates increasing will disproportionally impact London, with almost two-fifths (37%) of properties liable based in the Capital alone. The 6,100 premises have a rateable value of £9bn nearly half of the overall collective value of rateable properties above the £500,000 threshold. Overall, the number of properties in England that are subject to current business rates sits at 2 million, with a total rateable value of £71 billion. The proportion of properties liable for higher tax equates to a third of the overall rateable value at £22.6 bn (31.9%) despite representing less than 1% of all properties (16,780).

And finally, recent news reports refer to two very different ways to protest about property taxes. The first, and more serious, referred to a man in Iowa who was arrested for trying to bring a loaded gun into a Dubuque City Council meeting. The man live-streamed himself entering the building and moving toward the meeting which was being monitored by police officers. Officers stopped him and arrested him as he tried to enter the council chamber. Police said the man resisted arrest and assaulted an officer. Officers found a loaded semi- automatic handgun in his possession at the time of his arrest. He now faces federal charges. The second, and rather more imaginative, protest concerned a man in Cranford, New Jersey who caught the attention of his local councillors by breakdancing during their public meeting to discuss property taxes. After his breakdance, he made a short presentation and then moonwalked backwards out of the room. Now that’s a better way to make a protest!

Paul Sanderson JP LLB (Hons) FRICS FIRRV President, International Property Tax Institute

Compliments of the International Property Tax Institute (IPTI) – a member of the EACCNY