Property taxes are among the oldest forms of taxation, but these days they "are much less prominent than they once were," says The Economist. "To fund rising government spending, far more cash is raised from other sources, particularly income taxes, payroll taxes and value-added taxes (see left-hand chart)."
"A new study [PDF] by John Norregaard of the International Monetary Fund suggests that the average rich country, including all levels of government, raises under 5% of total tax revenue from annual levies on land or the buildings on it. The norm in middle-income emerging economies is lower still, at around 2% of all tax revenue (see right-hand chart)." In the United States, property taxes account for 17% of all government revenue, for comparison.
"That’s a pity," the authors argue. "Taxing land and property is one of the most efficient and least distorting ways for governments to raise money. A pure land tax, one without regard to how land is used or what is built on it, is the best sort. Since the amount of land is fixed, taxing it cannot distort supply in the way that taxing work or saving might discourage effort or thrift. Instead a land tax encourages efficient land use."