The Tax on Immovable Property, Different from the Land Plot: Theory and Practice of Application

Abstract

The tax on immovable property is one of the oldest types of taxes known to the financial and legal science. In fact, a land tax and a tax on immovable property, different from the land plot, are those local taxes that are subject to taxation in each territorial community. In addition, this tax: 1) relatively simple and transparent in administration; 2) is fixed and does not depend on the results of the economic activity of the payer; 3) encourages the redistribution of property from a less efficient to a more efficient owner; 4) facilitates a better assessment of own assets by payers-legal entities; 5) allows to bring in to taxation the income received as a result of shadow activity; 6) provides relatively stable and projected revenues to the budget. The problems of taxation of real estate in Ukraine are both economic and political in nature. Among the first group of problems is the choice of the form of taxation of real estate, the definition of tax base, tax rates, benefits, as well as differences in the taxation of certain types of real estate. The second group of problems is relate to the ambiguous perception of tax by citizens, the presence of a strong political lobby that allowed long to delay the introduction of this tax and the possibility of not paying even now.