EVALUATING DETERMINANTS OF PROPERTY TAX REASSESSMENT: MALAYSIAN PRACTITIONERS’ PRELIMINARY OBSERVATIONS

Authors

  • Asma Senawi School of Housing, Building and Planning UNIVERSITI SAINS MALAYSIA
  • Atasya Osmadi School of Housing, Building and Planning UNIVERSITI SAINS MALAYSIA
  • Nor Azalina Yusnita Abd Rahman Housing and Local Government Training Institute MINISTRY OF HOUSING AND LOCAL GOVERNMENT, MALAYSIA

DOI:

https://doi.org/10.21837/pm.v20i21.1118

Keywords:

Property tax, property tax reassessment, assessment quality, local authorities

Abstract

Property tax plays an essential role in funding local government overheads to provide basic services for residents. However, too little research has stressed the importance of property tax assessment quality, especially in terms of reassessment. The absence of a regular and frequent reassessment process leads to distortions in tax payments, lower revenue generation, and a higher risk of significant increases in tax liability. A preliminary survey was conducted to unpack the determinants of property tax reassessment to address this issue. Survey data from 37 officers revealed that nine of the identified determinants have a significant and positive impact on the successful implementation of property tax reassessment in Malaysia, with staff capacity an essential aspect. The neighbouring municipality influence appears to play a less impactful role. These findings highlight the success factors in conducting property tax reassessment activity, which would assist the long-term success of local authorities. Despite the importance of property tax implementation for the local authorities, this research suggests that organisations should also ensure the quality of property tax and its frequent reassessment to enhance overall performance.

Downloads

Download data is not yet available.

References

Abd Rahman, N. A. Y., Senawi, A., Mohamed Saraf, M. H., & Che Pin, S. F. (2021). Investigation of impediment factors in property tax revaluation practices. Planning Malaysia Journal of the Malaysian Institute of Planners, 19(16), 150–159. DOI: https://doi.org/10.21837/pm.v19i16.960

Agnoletti, C., Bocci, C., Ferretti, C., & Lattarulo, P. (2020). The revaluation of base values in property tax: Simulations for tuscany. Scienze Regionali, 19(2), 227–248.

Andrews, R., & Boyne, G. A. (2009). Size, structure and administrative overheads: An empirical analysis of english local authorities. Urban Studies, 46(4), 739–759. DOI: https://doi.org/10.1177/0042098009102127

Ashmat, I. (2016). Developing a sustainable tax efficiency model to reduce property tax non-compliance. In Universiti Teknologi Malaysia.

Atilola, M. I., Ismail, A., Achu, K., & Bujang, A. A. (2019). An evaluation of factors causing variance in property assessment. Planning Malaysia Journal of the Malaysian Institute of Planners, 17(9), 82–93. DOI: https://doi.org/10.21837/pmjournal.v17.i9.588

Atilola, M. I., Kamalahasan, A., Bujang, A., & Kamarudin, N. (2017). Evaluation of rating valuation appeal procedure: A comparative study of United Kingdom, Nigeria and Malaysia. International Journal of Real Estate Studies, 11(2), 93-101/

Awasthi, R., Nagarajan, M., & Deininger, K. W. (2020). Property taxation in India: Issues impacting revenue performance and suggestions for reform. Land Use Policy, 110, November 2021, 104539

Bidanset, P., McCord, M., Davis, P., & Sunderman, M. (2019). An exploratory approach for enhancing vertical and horizontal equity tests for ad valorem property tax valuations using geographically weighted regression. Journal of Financial Management of Property and Construction, 24(2), 231–250. DOI: https://doi.org/10.1108/JFMPC-04-2019-0033

Bougie, R., & Sekaran, U. (2020). Research methods for business: A skill building approach. In M. McDonald (Ed.), John Wiley & Sons Inc (Eight). John Wiley & Sons Inc.

Brandt, N. (2014). The Political Economy of Property Tax Reform. In OECD Working Papers on Fiscal Federalism (Issue 18).

Browne, R. H. (1995). On the use of a pilot sample for sample size determination. Statistics in Medicine, 14(17), 1933–1940. DOI: https://doi.org/10.1002/sim.4780141709

Cao, J., & Hu, W. (2016). A microsimulation of property tax policy in China. Journal of Housing Economics, 33, 128–142. DOI: https://doi.org/10.1016/j.jhe.2016.05.004

Carrillo, P. E., Castro, E., & Scartascini, C. (2021). Public good provision and property tax compliance: Evidence from a natural experiment. Journal of Public Economics, 198, 104422. DOI: https://doi.org/10.1016/j.jpubeco.2021.104422

Daud, D. @ Z., Kamarudin, N., & Mccluskey, W. J. (2013). Property tax in Malaysia and South Africa : a question of assessment capacity and quality assurance. Journal of Property Tax Assessment & Administration, 10(4), 5.

Dimopoulos, T., & Moulas, A. (2016). A Proposal of a Mass Appraisal System in Greece with CAMA System: Evaluating GWR and MRA techniques in Thessaloniki Municipality. Open Geosciences, 8(1), 675–693. DOI: https://doi.org/10.1515/geo-2016-0064

Eom, T. H., Bae, H., & Kim, S. (2017). Moving Beyond the Influence of Neighbors on Policy Diffusion: Local Influences on Decisions to Conduct Property Tax Reassessment in New York. The American Review of Public Administration, 47(5), 599–614. DOI: https://doi.org/10.1177/0275074017706754

Erdem, N. (2020). The need for re-engineering in the real estate appraisal system in Turkey. Survey Review, 52(370), 84–96. DOI: https://doi.org/10.1080/00396265.2018.1527087

Fraser, J., Fahlman, D., Arscott, J., & Guillot, I. (2018). Pilot testing for feasibility in a study of student retention and attrition in online undergraduate programs. International Review of Research in Open and Distance Learning, 19(1), 260–278. DOI: https://doi.org/10.19173/irrodl.v19i1.3326

Grover, R., Törhönen, M.-P., Munro-Faure, P., & Anand, A. (2017). Achieving successful implementation of value-based property tax reforms in emerging European economies. Journal of European Real Estate Research, 10(1), 91–106. DOI: https://doi.org/10.1108/JERER-06-2016-0027

Hughes, C., Sayce, S., Shepherd, E., & Wyatt, P. (2020). Implementing a land value tax: Considerations on moving from theory to practice. Land Use Policy, 94, 104494. In, J. (2017). Introduction of a pilot study. Korean Journal of Anesthesiology, 70(6), 601–605. https://doi.org/10.4097/kjae.2017.70.6.601 DOI: https://doi.org/10.4097/kjae.2017.70.6.601

Jashari, A. (2020). The Challenges of Collecting the Immovable Property Tax: The Case of the Republic of Kosovo. In Rochester Institute of Technology. https://scholarworks.rit.edu/theses

Kavishe, N., Jefferson, I., & Chileshe, N. (2019). Evaluating issues and outcomes associated with public–private partnership housing project delivery: Tanzanian practitioners’ preliminary observations. International Journal of Construction Management, 19(4), 354–369. DOI: https://doi.org/10.1080/15623599.2018.1435154

Kim, S., Chung, I. H., & Eom, T. H. (2020). Institutional Differences and Local Government Performance: Evidence from Property Tax Assessment Quality. Public Performance and Management Review, 43(2), 388–413. Local Government Act, Pub. L. No. Act 171, 1 (1976). https://doi.org/10.1080/18324460.1920.10439549 DOI: https://doi.org/10.1080/18324460.1920.10439549

Mahieu, B., Geys, B., & Heyndels, B. (2017). Fiscal Fairness as a Political Argument. Kyklos, 70(4), 622–640. DOI: https://doi.org/10.1111/kykl.12151

Massawe, H. T. (2020). Regulation of Property Tax in Tanzania: Legal and Administrative Challenges. KAS African Law Study Library - Librairie Africaine d’Etudes Juridiques, 7(3), 424–438. DOI: https://doi.org/10.5771/2363-6262-2020-3-424

Mccluskey, W. J. (1999). An empirical investigation into the effects of a change in the basis of the ad valorem residential property tax in Northern Ireland. Property Management, 17(1), 8–23. DOI: https://doi.org/10.1108/02637479910255721

Mccluskey, W. J. (2018). Property Tax: An International Comparative Review (W. J. Mccluskey (ed.)). Routledge. DOI: https://doi.org/10.4324/9780429431845

Mishra, S., Mishra, A. K., & Panda, P. (2020). What Ails Property Tax in India? Issues and Directions for Reforms. Journal of Public Affairs, August, 0–11.

Mohd, E., Amin Ayub, Z., & Mohd Anuar, H. (2018). Regulatory Barriers in Collecting Assessment Rates Arrears of Local Authorities in Malaysia. The Journal of Social Sciences Research, 2018(SPI6), 1049–1055. DOI: https://doi.org/10.32861/jssr.spi6.1049.1055

Nyabwengi, L. M., & K’Akumu, O. A. (2019). An evaluation of property tax base in Nairobi city. Journal of Financial Management of Property and Construction, 24(2), 184–199. DOI: https://doi.org/10.1108/JFMPC-05-2019-0043

Nyabwengi, L. M., K’Akumu, O. A., & Kimani, M. (2020). An Evaluation of the Property Valuation Process for County Government Property Taxation, Nairobi City. Africa Habitat Review, 14(1), 1731–1743.

Piracha, M., & Moore, M. (2016). Revenue-Maximising or Revenue-Sacrificing Government? Property Tax in Pakistan. The Journal of Development Studies, 52(12), 1776–1790. DOI: https://doi.org/10.1080/00220388.2016.1153076

Propheter, G. (2016). Managerial experience and organisational performance: A 15-year panel study of local assessors. Public Administration Review, 76(3), 438–446. DOI: https://doi.org/10.1111/puar.12440

Ross, J. M. (2013). A socioeconomic analysis of property assessment uniformity: Empirical evidence on the role of policy. Public Budgeting and Finance, 33(1), 49–75. DOI: https://doi.org/10.1111/j.1540-5850.2013.12001.x

Ross, J. M., & Mughan, S. (2018). The Effect of Fiscal Illusion on Public Sector Financial Management: Evidence from Local Government Property Assessment. Public Finance Review, 46(4), 635–664. DOI: https://doi.org/10.1177/1091142116676360

Sahari, S. N., Samsuddin, S., Bujang, A. A., Suratman, R., Rahman, M. S. A., Rangga, W., & Jiram, A. (2020). Review on Malaysia Tax Performance: Rates and Land Tax. International Journal of Psychosocial Rehabilitation, 24(03), 694–716. DOI: https://doi.org/10.37200/IJPR/V24I3/PR200826

Stine, W. F. (2010). Estimating the determinants of property reassessment Duration: An empirical study of Pennsylvania counties. Journal of Regional Analysis and Policy, 40(2), 143–159.

Zhu, G., & Dale-Johnson, D. (2020). Transition to the property tax in China: A dynamic general equilibrium analysis. Journal of Urban Economics, 115, 103214. DOI: https://doi.org/10.1016/j.jue.2019.103214

Zulkifli, N. A. A., Ab. Azis, S. S., Saliman, N. S. S., & Adi Maimun, N. H. (2021). Factors Causing Failure in Completing Reassessment Work Among Appointed Valuation Firms. Planning Malaysia Journal of the Malaysian Institute of Planners, 19(3), 123–133. DOI: https://doi.org/10.21837/pm.v19i17.992

Downloads

Published

2022-07-26

How to Cite

Senawi, A., Osmadi, A., & Abd Rahman, N. A. Y. (2022). EVALUATING DETERMINANTS OF PROPERTY TAX REASSESSMENT: MALAYSIAN PRACTITIONERS’ PRELIMINARY OBSERVATIONS. PLANNING MALAYSIA, 20(21). https://doi.org/10.21837/pm.v20i21.1118