Gauging the possibility of using property tax to respond to the rapid expansion of built-up area in Depok Municipality

Abstract

Over the last three decades, Depok Municipality has experienced rapid expansion of built-up area, due to the city’s strategic location as a satellite city of Jakarta that functions primarily as a dormitory town. Agricultural, plantation and vacant lands have been largely converted into different forms of built-up area. Some efforts should therefore be made to control this extensive land-use conversion. In particular, a fiscal instrument such as a property tax can be used not only as a source of city revenue, but also as a means for urban environmental control. In this study, we aim to gauge the potentiality of property tax in addressing large scale expansion of built-up area. In doing so, we employed Pearson Correlation and Moran’s Index analyses by comparing built-up area development and property tax performance in 2014 and 2019. The results indicate that property tax has not functioned very effectively as an instrument to steer built-up area expansion in Depok.