Enlightened by the theory of Tiebout and Hamilton about property tax as a benefit tax and the new view reformulated by George R. Zodrow and Peter Mieszkowski, this dissertation seeks to study the capitalization and regressivity of Government Rates in Hong Kong, which have already existed for 165 years in the city and are equivalent to property tax mentioned in western literature. Since both Hong Kong and Mainland China share the same structure of land lease system, it is meaningful to study the implications of Rates in the property market in Hong Kong at the juncture of a new wave of property tax reform in China commencing with the latest property tax experiment in two major cities: Chongqing and Shanghai. 　　This dissertation first reviews the history and describes the roles of Government Rates in the financial revenue and expenditure system of the Hong Kong Government to get a clear picture of where Rates are from, how they are collected and where they have been spent on. Meanwhile, effects of Rates and public expenditures on local residential property values of different classes during the year 1974-2008 are examine by applying time series of housing price index, percentage of Rates charge, and public expenditure, etc. Furthermore, in order to test whether Hamilton’s intra-jurisdictional capitalization exists, transaction data of the year 2000 from EPRC are employed to examine whether low income housing (small units) sells at relatively higher price compared with high income housing (large units) due to the fiscal surplus. The empirical results show no capitalization of Rates but capitalization of public goods exists and the Rates payment is shifted forward into the housing price. We find out that Rates in Hong Kong is not a capital tax, and actually it is a benefit tax and user fee paid for public goods. The last part of the dissertation concludes valuable lessons for the property tax reform in Mainland China. ii 2 / published_or_final_version / Real Estate and Construction / Master / Master of Philosophy

This study investigates two specific types of transactions---source of profits and real property gains---in the Hong Kong tax context as well as how the structure of transactions with tax implications affects taxpayers' and stakeholders' decisions in the context of taxation management. Effective tax planning, among other factors, requires the tax planner who makes investment and financing decisions to consider not only explicit taxes but also implicit taxes [Scholes and Wolfson (SW), 1992; 2002]. This study has two main objectives. First, using 73 and 161 published legal case decisions on locality of profits and gains from real property transactions respectively, this study runs binary logit tests to examine the relative significance of the major factors contributing to judicial decisions on locality of profits and gains from real property transactions. As such, it provides business managers with empirical evidence and insightful thoughts on gaining a proper understanding of the structure of business transactions for the purposes of taxation management. Second, it extensively reviews the corporate tax structure in the Asia-Pacific region, international corporate tax research, and the implicit taxes theories, thereby providing the institutional setting for the above empirical work. The empirical results indicate that the factor, "location of services/work rendered" is exceptionally positive and significant to judicial decisions on source of profits; three factors, namely "financial ability of taxpayer", "circumstances leading to disposal", and "stated or actual intention at time of acquisition of subject property" are statistically significant to judicial decisions on gains from real property transactions. The results of both are robust to the two logit models. / Cheung Kowk Chun. / "May 2004." / Adviser: Zhaodong Jiang. / Source: Dissertation Abstracts International, Volume: 65-04, Section: A, page: 1438. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2004. / Includes bibliographical references (p. 237-260). / Available also through the Internet via Current research @ Chinese University of Hong Kong under title: Taxation management and the structure of transactions evidences of source of profits and real property gains. An implicit tax perspective (China) / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest Information and Learning Company, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.