Member News

Update on Property Tax Issues: February 2019

The EACC, in partnership with the International Property Tax Institute (IPTI), wants to keep its members up to date with the latest developments in property taxes in the USA and Europe. IPTI has put together a selection of brief reports from articles contained in IPTI Xtracts which can be found on its website (



Lessons From Amazon’s Decision To Cancel New York City Headquarters

  • giving tax breaks to specific companies is a bad idea.
  • local politics and policy can also significantly influence whether a business succeeds

Amazon recently abandoned plans to build half of its “HQ2” in New York City. The company was going to receive about $3 billion in taxpayer subsidies for its New York office, and it appears that a small- but-vocal group critical of the subsidies had something to do with its change of plans.

This whole ordeal was a mess, but hopefully it’s taught companies and governments some valuable lessons.

First, giving tax breaks to specific companies is a bad idea. There’s substantial evidence that such tax breaks are largely a waste of money. They typically don’t have much influence on a company’s final decision and the promised benefits—more jobs, more economic growth—either don’t materialize or would have occurred regardless. Playing the tax-subsidy game is like betting against the house— everyone thinks they’ll win but in the end they’re left with empty pockets and little to show for it.

Second, companies need to think differently about where they locate. From an economic standpoint, New York City is attractive with its highly skilled labor force, dynamic and innovative environment, and huge market. But local economies don’t exist in a vacuum. For better or worse, local politics and policy can also significantly influence whether a business succeeds.

Amazon should have been aware of this considering its experiences in Seattle. Last May, Seattle tried to levy a $275 per-employee tax on Amazon, while several local officials have been vocal about the company not paying its “fair share.” Some also complain about Amazon’s contribution to Seattle’s high housing costs. This despite the fact that Amazon has generated billions of dollars in income for locals, as well as the sales tax and property tax dollars that go along with it.

In light of all this, one would think Amazon would want to hedge its bets by locating part of its corporate operations in a city more open to business. Instead, it doubled down by picking New York City, another city with several anti-corporation officials and community leaders. New York State Senator Michael Gianaris (D-Queens), for example, said that Amazon ruins communities and U.S. Rep. Alexandria Ocasio-Cortez (D-Bronx) praised Amazon’s decision to leave as a case of everyday New Yorkers defeating “…Amazon’s corporate greed.”

Of course, some of the backlash against Amazon was due to the tax breaks it was scheduled to receive, which is understandable. But that’s not the whole story. Many New York and Seattle officials think that big companies such as Amazon and their wealthy executives should do more to alleviate the problems that city policies often create or exacerbate.

Take homelessness in Seattle. Sure, it’s always going to take money to build housing in an expensive city. But the city’s zoning rules—heavily tilted towards single-family housing—also must change before enough housing can be built to truly bring down costs for residents. Simply raising taxes on companies like Amazon without allowing more apartments and other multi-family units is not a serious plan.

Or consider subway funding in New York City. Mayor Bill de Blasio wants to raise taxes on the wealthy to fix the dilapidated subway before addressing core problems like the system’s substantial inefficiencies. For instance, it costs about 67% more to move a subway car one mile in New York than it does in London or Paris. Again, any plan to fix the problem via more money alone is not a serious one.

So where might Amazon have gone instead? Several of Amazon’s 20 finalist cities are in the 10 most economically free metropolitan areas, as ranked by economist Dean Stansel in a recent study. These include Miami, Dallas, and Nashville. The New York metro area ranked 49th. Miami or Dallas may lack some of New York’s economic advantages, but from a policy perspective they are likely to be much less antagonistic.

That said, it’s hard to feel too bad for Amazon. It and other companies that clamor for subsidies are an important part of the problem. Amazon’s public announcement for HQ2 bids seems like a mistake now. If it had gone about its business quietly, its investment decisions probably wouldn’t be front page news today.

But public officials who insist corporations are responsible for society’s ills are also in the wrong. Corporations don’t deserve taxpayer money, but big problems like homelessness, deteriorating infrastructure, drug abuse, and joblessness shouldn’t be pinned on them either.

It’s easy for politicians to demonize rich corporate executives and demand they fund solutions. Most of us aren’t rich and thus won’t have to chip in, making for an easy sell. But a lack of money is often not the biggest problem, and solutions that ask more people to contribute force public officials to maintain some fiscal discipline.

It’s not clear how we get to a better place from here, but this Amazon fiasco has highlighted how terrible the current system is and that’s a start.


New York: The $238 Million Penthouse Provokes a Fierce Response: Tax It

The sale of a $238 million penthouse apartment at 220 Central Park South in Manhattan has spurred discussion of a possible pied-à-terre tax.

For the last five years, a bill that would create a so-called pied-à-terre tax in New York has languished in the State Legislature, where proposals for new taxes often go to die.

But after Kenneth C. Griffin, a hedge fund billionaire with an estimated net worth of $10 billion, added to his personal real estate portfolio last month by closing on a $238 million apartment on Central Park South, things may soon be different.

The record purchase — surpassing the cost of the next most expensive home in the United States by more than $100 million — was a stark reminder that when wealthy buyers like Mr. Griffin purchase expensive apartments as second homes or investments, New York City and the state get less financial benefits. If the buyers live out of state, they are not subject to state or city income taxes, and do not pay New York sales tax while outside the state.

A pied-à-terre tax would institute a yearly tax on homes worth $5 million or more, and would apply to homes that do not serve as the buyer’s primary residence.

Large cities around the world have been grappling with how to make wealthy absentee property owners pay for the privilege of owning secondary residences, a recent report from the Real Estate Institute of British Columbia shows. Sydney, Paris and London have all recently added or increased taxes on the purchase of secondary homes.

In Hong Kong, nonpermanent residents pay a 15 percent fee on the value of the home, and foreigners pay an additional 15 percent fee. Singapore has restrictions on the purchase of residential property by foreigners and a 15 percent tax. In Denmark, foreigners are required to obtain permission from the government to purchase secondary homes.

In Vancouver, where the greatest concentration of vacant properties is downtown, owners of empty residential properties are charged a 1 percent tax based on the assessed value.

In 2018, the number of vacant homes declined by 15 percent and about $33 million in taxes is expected to be collected — a revenue stream earmarked for affordable housing.

“The best level to do this at is the city level, because the taxes can go right back into fixing the problem,” said the mayor of Vancouver, Kennedy Stewart, who favors increasing the tax to 3 percent.

Until recently, elected officials in New York have been less receptive to a pied-à-terre tax. The bill, first introduced in 2014 by State Senator Brad Hoylman, a Democrat who represents some of the wealthiest neighborhoods in Manhattan, has been blocked by the ruling Senate Republicans.

But Democrats seized control of the Senate in November, and legislative leaders are now considering the bill.

“It’s something we haven’t discussed in the conference yet, but we will,” said Mike Murphy, a spokesman for the Senate Democrats.

Michael Whyland, a spokesman for the Assembly speaker, Carl E. Heastie, said the legislation, sponsored in the Assembly by Deborah J. Glick, will be “closely” reviewed as part of the budget process.

Richard Azzopardi, a senior adviser to Gov. Andrew M. Cuomo, said the administration was open to it as well.

Senator Hoylman acknowledged that the nearly quarter-billion-dollar apartment was a perfect poster child for his bill, saying that stratospheric sales like this “are the gifts that keep giving.”

In three previous tries, State Senator Brad Hoylman of Manhattan has seen his pied-à-terre tax bill die without even coming to a floor vote; he hopes this year will be different. “A $238 million purchase puts things into perspective,” he said.

Indeed, the City Council speaker, Corey Johnson, said he planned to urge legislators in Albany to authorize  the  pied-à-terre  tax  when  he  testifies  there  during  budget  hearings  next  week.  Mr.

Johnson’s support suggests that if the Legislature passes such a bill, the Council would then give its approval to implement it, if necessary. “I saw the story about the $238 million penthouse that someone might not even live in, and said now is the time to renew the call on this,” Mr. Johnson said in an interview. “I think this is doable and we should start the conversation now.”

It’s time for a pied-a-terre tax. We should tax luxury non-primary residences, like this one likely will be. Mr. Johnson, who is exploring a run for mayor in 2021, said that in his district, which includes the High Line, there are “apartments that are crumbling and apartments 50 feet away that are selling for millions of dollars.”

Mr. Hoylman’s legislation would create a sliding tax surcharge: For properties valued between $5 million and $6 million, a 0.5 percent surcharge would be added on the value over $5 million. Fees and a higher surcharge would apply to homes that sold for more than $6 million, topping out at a $370,000 fee and a 4 percent surcharge for homes valued at more than $25 million.

The office of the city comptroller, Scott M. Stringer, estimated that a pied-à-terre tax would bring in a minimum of $650 million annually if enacted today. “For us, $650 million a year is a lot of money to deal with things such as our subway crisis,” Mr. Stringer said, “but it’s a rounding error for the people who own these expensive part-time apartments.”

The people most likely to be affected by the tax are the “international elite” who can afford it, he said.

There were 75,000 pieds-à-terre in New York City in 2017, up from 55,000 such units in 2014, according to the New York City Housing and Vacancy Survey. In spite of the increase, the share of pieds-à-terre that comprise vacant units unavailable for sale or rent remained at about 30 percent in both years.

Mark Levine, a city councilman who represents Upper Manhattan, will propose in a forthcoming white paper that money from a pied-à-terre tax should be dedicated to fixing the city’s public housing stock and to create affordable housing. “Even the Victorian-era robber barons who built all these mansions were living there,” Mr. Levine said.

And because the city’s property tax system is antiquated, co-ops and condos are not taxed at their true market value, but on the income generated by similar rental buildings. A property tax reform commission is currently studying how to revise the city’s tax system.

“I would argue they need to pay more than the baseline property taxes because the value of the real estate depends on the viability of New York City, the quality of the public services, and they are not effectively carrying their weight for that,” said James Parrott, director of economic and fiscal policies at the Center for New York City Affairs at the New School, and a member of the property tax reform commission.

New York City is the second largest location of Mr. Griffin’s firm, Citadel. The company has been expanding in the city, recently acquiring more space at an under-construction Midtown office tower on Park Avenue; company officials suggested that commercial real estate taxes, combined with the taxes that Mr. Griffin will pay on his apartment, amounted to a significant contribution to New York City. Zia Ahmed, a spokesman for Mr. Griffin, declined to comment.

Mr. Parrott, who wrote a 2014 paper for the Fiscal Policy Institute that was the basis of Mr. Hoylman’s legislation, estimated that Mr. Griffin would have to pay $8.9 million per year if there was a pied-à- terre tax.

New York State does have a so-called mansion tax, a 1 percent tax levied on homes that sell for $1 million or more. That tax brought in $1.1 billion for New York City from the 2016 fiscal year to present, according to the Department of Finance.

Mayor Bill de Blasio, a Democrat who says income inequality will be the most important issue leading to the 2020 presidential election, has called for an expansion of the mansion tax, using Mr. Griffin’s apartment purchase as an example of what is “fundamentally broken in our country.”

Yet some people believe that this is not the right time for a pied-à-terre tax in New York. Kathryn Wylde, president of the Partnership for New York City, said many wealthy people had made the decision to leave the state after President Trump’s tax legislation reduced the amount of deductions that can be taken for state income and property taxes to $10,000, an amount easily surpassed in higher-tax states like New York.


Wisconsin: Governor Promises to Close ‘Dark Store’ Tax Loophole

Walmart, Target, and other big-box retailers around the U.S. are deploying “dark store theory” to slash property taxes. Now the state at the center of this fiscal threat may take action.

In November, CityLab investigated the practice of “dark store theory,” the novel legal argument big- box retail chains like Walmart, Target, and Menards use to slash their property taxes by assessing active stores as if they were vacant. The practice has resulted in the loss of millions of dollars in taxable value to communities in Wisconsin, Michigan, Minnesota, Indiana, and beyond.

Now Wisconsin Governor Tony Evers is pledging to shut it down: His proposed state budget will close the “dark store” legal loophole.

CityLab’s story was followed by additional reports about the issue by the New York Times, Slate, and others. These articles, and the practice itself, have generated vigorous debate about what big-box properties that proliferate across the urbanized U.S. should be worth.

Lawyers representing retailers say that big-box stores are effectively worthless at the point of sale, which should be reflected in the taxes they pay—even while the stores are still active. And many companies file repeat tax assessment appeals until municipalities capitulate. Tax assessors say that this argument defies common sense, and that the lost revenue will eventually force a heavier tax burden onto other homeowners.

State tax boards weighing the two sides have largely been split about who’s right. And municipal finance experts have warned that fiscal havoc lies ahead for local governments across the U.S. if the issue isn’t resolved by state tax laws.

The commitment to close the loophole by Evers, Wisconsin’s newly elected Democratic leader, also follows statehouse lobbying by the Wisconsin League of Municipalities and the Wisconsin Counties Association, two groups representing the interests of local units that levy property taxes. In 2018, state lawmakers considered a bill that would have blocked the practice, but the measure failed to reach a vote.

“Having large big box stores have the property tax levied at a level as if the building is empty is absolutely a non-starter with me,” he told reporters this week. “It should be fair for all and in order to do that we have to close that loophole.”

Still, this element of Evers’ budget proposal is likely to find a challenger in Wisconsin Manufacturers

& Commerce, the trade group representing retailers that have benefited from this tax appeal tactic. And Indiana, the only state that has enacted legislation to combat dark store theory, has continued to see challenges by commercial property tax payers using the same type of argument.

To Robert Hill, a Minnesota-based attorney who is perhaps the nation’s top lawyer propagating dark store theory on behalf of big-box stores, the issue is a matter of rebalancing the property tax burden that currently weighs too heavily on successful businesses. Corporations must defend themselves from being “discriminated against” by assessors, Hill told CityLab last year.

“We eat what we kill,” he said. “We kill only because they need to be killed.” Evers’ budget proposal is expected later this month.


Texas: Property Appraisal System Needs a Major Revamp

Texas property owners pay some of the highest taxes in the country, and that’s not likely to change soon. One reason is how the state revalues property for tax levies.

Annual appraisals tend to push the value of properties, and property taxes, higher, even if the actual tax rate does not change. Local governments are not inclined to reduce the tax rate because they need more revenue to support the state’s economic and population growth which leads to more schools, road expansions and other infrastructure growth.

It’s a flawed system that pushes the cost of living and doing business in the state higher and leaves many property owners with few alternatives other than litigation to try to keep those costs under control, says Rahul Patel of Patel|Gaines, one of the state’s leading property tax attorneys.

Each appraiser working in Harris County, the third-most populous county in the nation, has to place a value on about 5,500 parcels every year. That amounts to an overwhelming workload of about three parcels per hour, Patel argues in a column for the Houston Chronicle, and leads to inaccuracies in appraisals.

“Because the state and the local jurisdictions choose to re-appraise property more frequently than they were before, the number of protests has gone up,” Patel says.

In 2018, the Bexar County Appraisal District raised taxable property values an average of 9 percent. More than 100,000 property owners in that district wound up protesting their new property values.

Some of those protests may have been a simple disagreement over how much a property was worth. But others resulted from such inaccuracies as misidentified parcels, failure to take state-allowed exemptions into account or lack of information, such as occupancy rates, that affect the value of commercial real estate.

The inaccuracies are linked to the volume of work, Patel says. With appraisers responsible for so many properties, the appraisal districts lump properties into categories, ratios and valuations that don’t always make sense for a specific property. And the cost of rectifying those errors through protests lands squarely on the property owner.

The appraisal review boards (ARB) that decide disputes between the appraisal districts and property owners are composed of volunteers from the community. In many cases, Patel says, ARB members lack the education and experience to determine the merit of a commercial property owner’s argument, and their decisions tilt in favor of the appraisal district.

“We genuinely have a shortage of quality folks who are signing up to be appraisal review board members,” he says. “There are issues of understanding the complexities of cap rates and occupancy, vacancies, how to deal with distressed assets that have mortgages and deficiency issues, and types of funding that are in place. If you do not have an appraisal review board that understands all those complexities, then you have a fundamental problem of getting your point across.”

Patel adds that as appraisal review boards are currently set up, the appraisal districts have a home- court advantage. Many members of the appraisal review boards have been in place for years, are located in appraisal district offices, and are comfortable with the officials at that office. Further, the current system lacks transparency, with voting records of appraisal review board members unavailable to the public.

“You have to realize as a property owner that you’re at a home-court disadvantage,” he says. It’s a system that leads to litigation, as commercial property owners go to court to get the expertise and individual attention to their case that’s needed for a favorable outcome.

A possible solution that could at least reduce the number of appeals that go to court is to revamp local appraisal review boards while adding transparency to review board members’ voting records.

“I think we’re better served as a solution to say, ‘Let’s use a portion of our budget and maybe hire qualified folks to sit on special panels, panels that deal with industrial, commercial, high-rise office buildings, medical facilities, things that require a breadth of information to sit and digest and come up with a better valuation,” says Patel.

He has advocated allowing property owners to pay a fee to have their appeals heard in outside jurisdictions, thus offsetting the home-court advantage. Some of that fee could be used to pay for more highly-qualified appraisal review board members as well.

“The best system starts with having the most educated folks with regard to the types of property that are being heard at the appraisal review board level,” he says. That means panels of experts should be set up to review valuations for different types of property.

“Right now, appraisal review boards can hear anything from a residential house to a piece of vacant land to a $150 million mixed-use development. When you go to undergraduate school, you don’t all jump into the same class together,” he says.



Germany: German states, federal gov’t agree key points of property tax reform

The German government and 16 regional states agreed on Friday on how to reform property tax calculations following a court ruling that the current system was outdated and unconstitutional.

The agreement – which calls for using surface area, location and actual net rents to calculate the tax – will form the basis for a legislative proposal that must be enacted by the end of the year, and go into effect after 2024, officials said.

The two sides had been at odds over whether the property tax should reflect the value of the property, or whether it should be calculated solely on the basis of its surface area.

Property tax generates 14 billion euros ($17.30 billion) in revenues for local authorities annually, and affects not only property owners but also tenants through “additional costs” they pay with their rent, or so-called “Nebenkosten”.

Finance Minister Olaf Scholz said the agreement hammered out by the states and the federal government was “a socially just solution.” Thomas Schaefer, the finance minister of the state of Hessen, said the agreement would simplify many valuation issues.

But Germany industry groups and a taxpayers group criticised the agreement.

Eric Schweitzer, head of the DIHK German Chambers of Commerce, said focusing on rents and land valuation would lead to additional bureaucratic burdens for companies.

Reiner Holznagel, head of Germany’s Taxpayers’ Association, said the compromise would hit students, young families and retirees in urban areas particularly hard.

Germany’s constitutional court in April ruled that the property tax must be reformulated by the end of 2019 because it was based on outdated values.

The basis for the tax in western Germany is linked to 1964 property values, while property taxes in former East German states are based on 1935 values. This makes property taxes higher in western Berlin than the former east and means taxes may be low on properties near the former Berlin Wall that have since rocketed in value.


United Kingdom: Online sales tax to help save high street falls foul of EU

An online sales tax to help high street shops has in effect been ruled out by the Treasury because it would fall foul of EU rules.

The Times has learnt that Mel Stride, financial secretary to the Treasury, has written to Nicky Morgan, chairwoman of the Treasury select committee, to say there was a “high risk” that any such tax would breach the bloc’s state aid rules.

The UK is due to leave the European Union on March 29 but under the draft withdrawal agreement. Britain has accepted “dynamic alignment” with Brussels on state-aid rules.

Retailers including Dave Lewis, the chief executive of Tesco, and Mike Ashley, the owner of Sports Direct, have called for an online sales tax to help high street shops to compete on fairer terms. Mr Lewis suggested that the tax could be 2 per cent of sales and Mr Ashley said the levy should be applied to retailers that have more than 20 per cent of their turnover online. Mr Ashley added that without action the high street would be dead by 2030.

Amazon pays only £63 million in business rates in Britain despite recording retail sales of more than £8 billion. Debenhams and Next each paid £80 million last year on revenues of £2.3 billion and £4.1 billion respectively.

Campaigners have accused Amazon of using complex international tax structures to avoid paying its fair share in Britain. Last year the retailer paid less than £5 million in corporation tax. More than 20,000 high street shops closed last year and 23,000 are predicted to close this year, at the cost of 175,000 jobs.

Last summer Philip Hammond, the chancellor, said: “We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online.” Last month Sir John Timpson, the veteran retailer and the government’s high streets adviser, told parliament that “it is quite clearly the right thing for government to do, to level the playing field between bricks-and-mortar retailers and internet retailers”.

Mr Stride’s letter appears to rule out the option of a sales tax. It says: “Tax proposals have been judged to constitute state aid in the past . . . This [online sales tax] could distort competition.” He added: “The government considers there a high risk that such a tax would be found to be state aid.” Treasury sources insist that they have not ruled anything out but analysts believe that Mr Stride’s comments signal the death of the idea.

Robert Hayton, of Altus Group, the retail consultancy, said that “time is of the essence” to help to save the high street. “Traditional bricks-and-mortar retailing is obviously property intensive,” he said. “The reliance on property leads to a larger tax-to-turnover ratio that, if left unchecked, will contribute to the further deterioration of our high streets. If an online sales tax for large online retailers would be deemed unlawful, the government urgently needs to develop a coherent strategy to address the imbalance.”

The Treasury said: “We recognise this is a difficult time for high streets, with many retailers struggling with high rents and changing shopping habits. That’s why at last year’s budget we outlined a £1.6 billion plan to help the high street, including £900 million of targeted business rates relief and a £675 million future high streets fund to help town centres evolve.”


United Kingdom: The present model of funding for local government is unsustainable

As ever when it comes to local government, it’s news about what might happen to our council tax bills that grabs headlines. So it was last week when the Local Government Information Unit and the Municipal Journal reported that nearly all councils intended to raise their council tax rates next year, three quarters of them by more than 2.5 per cent. At the same time, nearly all are planning also to increase fees and charges. And more than half intend to dip into their reserves.

Given the steep cuts in central government support, which have resulted in cuts of a fifth in council spending since 2010, these pressures should hardly come as a surprise. Local councils have been squeezed harder than many of the other big public services — health, schools and defence, for example. So it was equally unsurprising to learn in the same survey that fully 80 per cent of councils say they are not confident in the sustainability of local government finance. Literally none said that they were “very confident”.

While their role has diminished in recent decades, local authorities continue to play a crucial part in our lives, in our democracy and in our public services provision. Even excluding school funding, over which they have little or no control, they spend more than £40 billion a year. They are responsible for

funding and delivering social care for adults and children. They support communities by providing local amenities and overseeing local economic development. They deserve far more of our attention. When you get 80 per cent of councils worrying that the funding system is not sustainable, it’s time to sit up and listen.

Part of the reason for the concern is the scale of cuts. But this isn’t only a story of cuts. Funding changes have reshaped local government in two ways. First, it is the councils most dependent on central government support — typically those in poorer and more urban areas — that have suffered much the biggest spending cuts. We have stopped redistributing so much from better-off to less-well-off areas. That said, it does seem to be some of the shire counties, which have suffered smaller cuts but started with less in the first place, that are struggling most.

Second, councils have responded to reduced resources by focusing more and more on an irreducible core of activities. Despite the overall scale of cuts, spending on children’s social care has actually risen, while spending on adult social care has been cut by much less than the average. The result, of course, has been very deep cuts in almost all other services, with spending on housing, planning and economic development down by a half. Excluding schools, almost two thirds of the budgets for which councils are responsible now go on social care.

The primary purpose of local government, then, has become the provision of social care. Yet social care policy is set in Whitehall. You are supposed to be entitled to the same provision wherever you live. At the same time, councils are becoming more dependent on their own tax-raising powers. Not only have government grants been cut, making locally raised council tax more important, but part of business rates revenue is now also devolved. A council’s resources now depend in part on local growth in business rates.

But there is no correlation between growth in business rates and the need for social care spending. One perfectly understandable policy aim — to set national standards for social care — comes crashing headlong into another — the desire to devolve taxes and increase the incentives on local authorities to raise their own revenues. You can’t have both, however much ministers might pretend you can.

Government policy is also to ensure that local government as a whole becomes increasingly self- reliant, eventually funding itself fully from a combination of business rates and council tax. Well, if we know one thing about demands for spending on social care, it’s that they are increasing and will continue to increase as the population ages. Demands will rise faster than revenues from council tax and business rates. Even annual rises on council tax bills of 4 per cent will not see revenues keep up with demand.

So those councils responding to the survey are right. The present system of local government finance isn’t sustainable. Something is going to have to give.

It already has, in a way. The past few years have seen a series of top-ups to planned funding to bale out increasingly overstretched social care services. Plans set out in 2015 have proved undeliverable.

That’s no way to run things in the longer term, although continuing to muddle through by topping up spending with additional ring-fenced grants is probably the short-run default. Eventually, we will need to make a choice: more central funding and a genuinely national set of standards, or more devolution of tax-raising powers and more acceptance of local variation. Either local councils will need more tax- raising powers of their own, perhaps from a local income tax, or central government will have to find those revenues from central funds.

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