THE METHODOLOGY OF PROPERTY TAX ASSESSMENT OF SPECIAL PROPERTIES… A CRITIQUE

Abstract

Property tax is levied, generally, on all properties for the raising of revenue as in the case of income tax. There is now no longer a question of justifying property tax but rather justifying the amount collected and indirectly the method of assessment. Adam Smith in The Wealth of the Nations refers to the certainty and non-arbitrary nature of tax as one of the canons of taxation. The Government should not be extortionate. On the contrary, to ensure public confidence, great care must be exercised in assessing the annual value correctly. This implies that the methods of assessment used should be the most appropriate within the circumstances. However, problems may emerge when special properties are considered. The valuation of special properties have always been hailed as the nemesis of the professional valuer. The exercise of determining the annual value is daunted by the absence of market information and the need for a high degree of personal judgment. The valuer must adopt an approach which exhibits the lowest level of uncertainty. A government should not await public discontent to instigate a review and modification of the assessment methodology. A study in this area is thus justified. This dissertation focuses on the assessment practice of special properties. Local approaches will be studied vis-a-vis the British methods. It is hoped that the study will either justify the current practice, elucidate discrepancies or reinforce any need for modification in the local practice.