Real property tax assessments : an examination of the consequences of a departure from the specified basis of assessment

The real property tax plays a significant part in the fiscal systems of the United Kingdom and Canada; and it is important that the burden of the tax is distributed according to the wishes of the legislature. Generally, the liability to the tax varies with the 'value' of real property owned or occupied by the taxpayer; but 'value' is a term that requires definition. Where the interpretation of the term by the assessors differs from the legal definition, the distribution of the tax burden will differ from that desired. In addition, a conflict will exist with each new assessment between adopting the assessor's interpretation of the 'value' concept and adopting the legal definition. The examination of these problems is not limited to the context of any one particular jurisdiction, but reference is made to the situation in England and Wales, and in Canada. It is shown that the legislature has many alternatives available when adopting a basis of assessment and the bases adopted in British Columbia and England and Wales are examined as examples. If the current assessments differ from those required by law, the assessor has, in practice, a number of alternatives available for the maintenance of the roll between revaluations. These are considered. It is seen that only where there is a constant relationship between existing assessments and those required by law, will the distribution of the tax burden be correct. In other cases inequality will result and measures of the extent of this inequality are proposed. The conflict between the meanings of 'value' to be adopted for new assessments will depend on the definitions laid down by Statute and by the judiciary; on the meaning adopted by the assessor; and on the legal provisions for uniformity of treatment. Examples of the legal provisions for uniformity of treatment in England and Wales and in Canada are examined but no universal solution to the conflict is produced. Instead it is suggested that new properties be brought onto the roll at figures which would improve the distribution of the tax burden. Finally in view of the imperfections in the real property tax, alternative treatments for its improvement are summarised.Business, Sauder School ofGraduat