The Development of Property Taxation in Economies in Transition : Case Studies from Central and Eastern Europe

The transition economies of Central and
Eastern Europe, through the reform process of
decentralization, are now seeking the devolution of fiscal
powers, and responsibilities from central, to local
governments, within financially sustainable environments. To
this end, a system of local budgets, and taxes needs to be
devised, over which local governments may have control.
Thus, this report focuses on the tax on immovable real
property, one of the most important local tax options, and,
undertakes comparative analysis of tax policy formulation,
within a context of rapid institutional changes. Case
studies provide insights into the policy debates, and
choices that guide the process of property tax reform, and,
shed light on the entire cycle, from initial impetus, to
resulting legislation, and the subsequent administrative
challenges of assessment, collection, appeal, and review.
Because of the multiple roles of property taxation (as an
instrument of decentralization, an element of property
rights, an adjunct to privatization and restitution, and a
source of revenue), it is appropriate to consider its
development in multiple contexts. Therefore, the cases range
from first generation reformers, i.e., Poland, Estonia,
Slovakia, and parts of the Russian Federation, to later
efforts in the Czech Republic and Armenia. These cases aim
to broaden the understanding of available alternatives, and
their relationship to specific political, legal, and
economic settings.