OECD calls for higher tax to prevent bubble

(American Chronicle): A leading international body last week argued that higher property taxation could prevent a future housing bubble. In a report titled Choosing A Broad Base-Low Rate Approach To Taxation, the Organisation for Economic Co-operation and Development sets out the best areas for governments to raise taxes as part of their fiscal consolidation. It argues that property taxation is more efficient, more stable and harder to evade than other taxes and can be more progressive. Many OECD member countries use outdated valuation methods and a proper system is crucial to effective property taxation, the report reveals.

The report states: "Owner-occupied housing has a favourable tax treatment relative to other forms of investment in many OECD countries through reduced tax rates or exemption for imputed rental income, mortgage interest payment deductibility and exemptions from Capital Gains Tax."

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