Arjen Schep, Researcher and Research Manager at the Erasmus Study Center for Taxes at Sub Central Governments, elaborates on the use of fiscal instruments for specific urban tasks and challenges.

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Municipal Taxes as Instruments for
Governance of Land Use
Arjen Schep LLM, PhD
Academic Researcher
Erasmus Study Center for Taxes of Sub Central Governments (ESBL)
schep@law.eur.nl
www.linkedin.com/in/awschep

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1.What else is new?
2.Disclaimer
3.Wishful thinking?
‘Golden Bend’, painted by Gerrit Berckheyde, 1685

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1. What else is new?
From: J. de Wagenaar, Amsterdam in zyne opkomst, aanwas,
geschiedenissen, voorregten, koophandel, gebouwen,
kerkenstaat, schoolen, schutterye, gilden en regeeringe (1765)

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2. Disclaimer
• No taxes on income,profit or capital
• Closed amount of taxes available
Taxes of Dutch Municpalities (2017) Billion € %
Municipality Fund (Grants) 33 58,9
Property Tax 4 7,1
Other Taxes 1 1,8
Charges and fees 4 7,1
Land Development revenues 4 7,1
Other 10 18
Total 56 100

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3. Wishful thinking?
• System change not likely, but task-based approach
can work
Ø Examples from the recent past:
o Business improvement Act (Wet op de
bedrijveninvesteringszones)
o Act on Special Measures for Metropolitan
Problems (Wet grootstedelijke problematiek)

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3. Wishful thinking? (3): Low hanging fruits?
OECD: instruments that could complement spatial development objectives
(table 2.9,p 114):
Instrument Current Dutch alternative
1. Brownfield redevelopment incentives Higher building fees for greenfield
development en lower building fees for
brownfield development
2. Historic rehabilitation tax credits Make a fund for subsidies from revenue of
tourist tax and/or vermakelijkheden-
retributie (entertainment fee)
3. Transfer of development rights No current alternative available
4. Use-value tax assessment Farmland is currently not assessed (not
based on spatial policy though)
5. Development impact fees Only in greenfield development there is
payment for less profitable part of the
development (e.g. social housing)
6. Betterment levies Baatbelasting (needs revision). Not a real
betterment levy, only cost recovery from
benefiting properties

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Concluding remarks
• Value capturing:
Ø more possibilities to differentiate property tax
Ø Allow municipalities to raise taxes on income,
profit or capital
• Create and design new instruments for specific
tasks and challenges

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