Towards a Sustainable Property Tax System for Regional Development by Integrating the Antifragility Concept

Abstract

This study presents a novel approach for developing a sustainable property tax system, aimed at enhancing economic stability and promoting sustainable regional development. This research employs a phenomenological methodology, which includes a comprehensive review of the scientific and practical literature, and their critique and synthesis. The authors also draw on their experiences with the tax system transformation within their own country. This study explores the integration of a consensual governance approach and the concept of antifragility into the complex issue of property taxation. The primary objective is to design a property tax management model that not only fulfills its economic functions, but also fosters an antifragile taxpayer society, contributing to the creation of a resilient and socially cohesive community. The findings demonstrate that a consensual and transparent property tax system, actively involving local stakeholders in decision-making processes, not only reduces resistance to tax reforms but also strengthens a community’s ability to adapt to economic fluctuations. By integrating the principles of good governance and sustainable development, the proposed model promotes socio-economic stability and provides a flexible framework that can accommodate diverse stakeholders needs, ultimately benefiting the broader community through enhanced social cohesion and long-term sustainability.

1. Introduction

Taxation plays a crucial role in every economy and directly impacts the assets of individuals globally [1]. For this reason, tax systems are highly controversial [2,3,4]. They are accused of being overcomplicated and imposing a high burden unsuited to the actual financial situation of payers. This critique spans both global trends and specific regional practices, reflecting widespread dissatisfaction with current systems. For years, many academics and practitioners have called for simplifying tax systems [5,6,7,8,9,10] and a more ethical approach [11]. An appropriate approach is also required to make changes to various elements of the tax system. The policies and standards set by multilateral agreements and international organizations play a crucial role in promoting fairness, good governance, and awareness of the societal impact of taxation on a global scale, which in turn influences regional political practices. Organizations, such as the International Association of Assessing Officers (IAAO), the International Property Tax Institute (IPTI), the Lincoln Institute of Land Policy, and the World Bank, through their research and guidelines, contribute to shaping tax policy development to enhance transparency, accountability, and the positive societal impact of taxation across different administrative and cultural contexts.

Changes in tax policy, however, are influenced by the dominant political forces within legislatures, whether at a global, national, or regional level. Left-wing politicians have traditionally been associated with higher taxes and broader services, while right-wing politicians have been the opposite [12]. Left-wing supporters are considered to favor progressive taxes (i.e., taxing the rich more than the poor) more than right-wing politicians do [13]. Experience has shown that irrespective of the political option, changes in the tax system are often developed behind closed doors and implemented arbitrarily. The criticism of such political practices in the field of taxes, as discussed in this paper, reflects both global trends and specific regional examples. This includes the observation that these practices are not confined to any single country or region, but are prevalent worldwide.

According to Rahman [14], this way of implementing reforms does not consider the principles of sustainable development and is not in line with the principles of good governance. The old ways of doing politics are becoming irrelevant because the demographic majority in the coming years will no longer consist of post-war baby boomers, who are accustomed to surviving in all conditions, or Generation X perfectionists, who live by imposed rules [12]. Society will be mainly composed of representatives of the millennial generation [13], standing between submissiveness and rebellion, as well as the following generations, such as Z and Alpha, who, immersed in the digital world of prosperity generation and global information sources, are bolder, ready to defend their views, and will no longer submit so quickly to arbitrary management. The authors of [13] suggested that even the best change projects will only work if the approach shifts from being repressive to conciliatory, sustainable, and based on mutual consent and benefit. However, in the current climate of intense competition for attention, where establishment politicians tend to pursue the politics of fear and populists the politics of anger, such a conciliatory approach is often overshadowed. To achieve meaningful change, it is crucial to move beyond these divisive strategies and focus on building consensus and trust. At the aggregate level, the news media and citizens tend to pivot toward the establishment politics of fear or the populist politics of anger [15]. Fear and anger are interconnected—too prolonged exposure to fear can trigger a reaction in the form of anger. When new rules are introduced that are perceived as something out of one’s control, and one has to come to terms with them, this merges with the moral world of worry and anxiety [16]. As a result, adequately fueled anxiety can continually be transformed into fear, and prolonged fear can be channeled into aggressive strategies of “us” against “them” [17]. This mechanism can also be triggered by attempts to reform the tax system and its components, e.g., wealth or property.

To prevent the emergence and escalation of the emotion of anger and to move closer to acceptance, tax reforms should be introduced in line with the idea of consensual governance. Currently, good governance is recommended in all political aspects, based in the ideas of honest governance and acceptance governance. Honest governance means transparency and the absence of corruption, which was advocated at the Davos World Economic Forum of 2024 summit [18] as one of the main ways to “unlock good governance”. On the other hand, acceptance governance emphasizes the importance of interaction and participation, which should contribute to deactivating the anger bomb against the not-yet-defined “them”. It is called “governance by acceptance” and develops “power-with”, transforming a top-down causality into guided responsibility for the common good. It leads to fostering the creation of an antifragile society that, by co-participating in the system, co-creating it, feeling a part of it, and feeling a shared responsibility for its operation, is immune to the destructive impact of diverse, exogenous factors. Meanwhile, the standard actions of public authorities leave much to be desired and, in effect, are perceived as an attempt to keep the elements of the transformation of the tax system secret until the very end.

The main objective of the research presented in this paper is to develop a consensual approach to improve the sustainability of the property tax system that will lead to an antifragile taxpayers society. This objective is relevant for both a global context and within specific regions, where the principles of antifragility and sustainable governance must be adapted to local conditions. Antifragility goes beyond theory, influencing practical approaches to the design and governance of systems, leading to more resilient and adaptive structures, including the property tax system. The ways of governing must be adapted to the attributes of the people who make up societies, creating communities that can not only withstand changing conditions, but also benefit from uncertainty and change to thrive in and adapt to a dynamic economic environment. An antifragile approach requires more excellent elasticity, less centralized planning, and a deeper understanding of the complexity and variability of systems.

The main point of this research is the following thesis: “In the 21st century, systems based on arbitrary, unilaterally imposed rules are no longer appropriate. A modern, sustainable approach should be based on consensuality in honest governance”.

In light of the thesis set out, the realization of the main objective of this research was based on several key assumptions:

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Taxpayers are sensitive to changes in tax systems, including property tax, as real estate is their most crucial and valuable asset.

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Increasing the decision-making involvement of local community members is the basis for creating a sustainable and consensual property tax system.

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A sense of empowerment reduces anxiety, offsets anger, and promotes taxpayer anti-mobility.

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Antifragility is reinforced by a sense of connection to the local community and the place of residence, so linking the property tax system to the benefits of the local community allows for the acceptance of the system’s modernization.

Considering the complex interplay of the factors involved in these assumptions, the authors sought to examine the potential applicability and relevance of specific theoretical frameworks for achieving the research objectives. In this context, a hypothesis was formulated as follows: “Consensual approaches and the concept of antifragility theory are valuable tools for supporting the creation of a sustainable, acceptable, and fair property tax system”.

This research employs various methods, due to the complex nature of property tax system management, which necessitates an interdisciplinary and holistic approach. This study utilizes phenomenological methodology, including a literature analysis and critique, as well as analysis and synthesis. This paper delves into the relationship between property tax transformations, the consensual approach, and the concept of antifragility within the framework of designing a sustainable property tax system.

The structure of this paper consists of the following sections: First, the introduction covers the problems associated with this topic and provides the background for designing a sustainable property tax system. This section also specifies whether the discussion pertains to global or regional trends. The third part explores the concept of antifragility from the property tax system perspective. The subsequent section presents the authors’ proposal for a sustainable and consensual property tax system, leading to the profile of an antifragile taxpayer. Finally, the paper concludes with a discussion and conclusions.

2. Integrating Sustainable Development Rules into Property Tax System Design

A sustainable tax system is a term widely used today by government administrations and analysts. However, taxpayers themselves use this term much less frequently. This may be because, to date, there has yet to be a system that all stakeholders can universally understand as sustainable according to the general idea of the concept. This discrepancy arises from the differing goals of the various stakeholders within the property tax system, which are often antagonistic [19,20,21] Therefore, the most crucial task in defining and creating a sustainable tax system is to reconcile these differing interests by finding a common ground for designing the tax system.

The most recent and relevant research on property tax systems highlights a variety of approaches and issues across different countries.

Regarding Germany, a notable study discussed the constitutional challenges facing the country’s federal property tax model, which is based on outdated property valuations, potentially leading to inequitable tax burdens [22]. Meanwhile, property taxation in India has been analyzed with a focus on the role of regulatory reforms and ICT-based approaches to improving tax rolls, valuation accuracy, and overall revenue performance, offering valuable insights for other developing nations [23]. These studies collectively underscore the complexities of property tax systems and the necessity for continual reforms to ensure fairness and efficiency. Many contributions from both theory and practice have argued that incorporating sustainable development rules into property tax system design is essential for achieving a balanced and forward-thinking fiscal policy. Sustainable development principles emphasize balancing economic growth, social equity, and environmental protection, ensuring that all three pillars support and reinforce each other. In the context of property taxation, this translates to crafting systems that not only meet revenue requirements, but also foster long-term community well-being and environmental stewardship. By embedding these sustainable development principles into property tax system design, policymakers can create a taxation framework that supports holistic and long-term objectives [14,24,25]. Unel and Yalpir [25] argued that such a system would be more resilient to economic fluctuations and social changes, providing a stable foundation for continuous improvement and innovation. Additionally, a sustainable property tax system can enhance public trust and cooperation, as taxpayers perceive it to be fair, transparent, and aligned with broader societal goals, ultimately promoting economic growth and investment [20,26,27]. In the United States, a significant study revealed the regressive nature of property tax assessments, where lower-priced properties are often over-assessed compared to higher-priced ones, disproportionately burdening less affluent homeowners [24]. This added to the ongoing debate about property tax fairness, highlighting the need for continual assessment reforms to ensure that the tax burden is equitably distributed among different income groups. Hazlitt observed [28] that “Taxes inevitably affect the behavior of those from whom they are levied”. According to [21], taxpayers’ reactions are not only purely economic. They are very often psychologically and sociologically determined. The taxpayers’ subjective assessment of their ability to bear the tax burden in their economic situation is of decisive importance. However, in addition to their financial capacity, a critical quandary is the sense of paying the tax, the fairness of the collection, and the proper redistribution of the money. According to Gomułowicz [29], “a phenomenon described in doctrine and confirmed in tax practice as an ‘over-reaction’ to fiscal pressure” may arise. This author also emphasized that the two causes of this overreaction—economic and psychological—are mutually contingent: “Taxation inflames the psychological boundary when the tax burden causes the effect of taxation not to be realized in the expected amount”. In line with this perspective, research from Ukraine provided a comparative analysis of property tax systems, focusing on the effectiveness of market-based property valuation and its implications for local budgets [30]. These studies highlight the importance of transparent and up-to-date property valuations for maintaining public trust and ensuring that tax revenues are used efficiently to benefit local communities. Recently, Avenancio-Leon and Howard [31] explored the over-assessment of a particular group of homeowners, revealing that assessment ratios were disproportionately higher for African Americans (also see [32]). This aligns with broader concerns within the literature regarding the lack of systematic national studies on assessment regressivity and its implications for socio-economic stability. Traditional approaches to property taxation, as discussed in public finance and urban economics textbooks, often assume that property values are well-known, and focus on the efficiency and fairness of the tax system [33,34]. However, these conventional models typically overlook the need for a property tax system that not only ensures economic efficiency but also promotes social cohesion and resilience in the face of economic fluctuations.

The property tax presents many paradoxes. It is a long-standing levy, and, at the same time, it is constantly changing in response to political, economic, and administrative developments [35]. For citizens not to rebel against paying taxes, including property tax, it is essential to have a sense of its existence and the fairness of its collection. The problem of creating a model for a sustainable tax system troubles the governments of many countries, because most countries have a property tax, but only some of their citizens like it. Six unsustainable reactions of taxpayers have been described in science [36]:

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Tax compliance, i.e., meeting the tax obligation;

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Flipping the tax;

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Looking for legal ways to avoid having to pay the tax (so-called tax optimization);

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Making up the tax;

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Illegal tax evasion;

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Withdrawal from the taxable activity.

Leaders need to be able to design a perfect property tax with no possibility of starting with a blank slate. There is usually already some system for taxing properties, with various established special interests and a political, social, and historical context. The challenge is to make an existing property tax less controversial [28].

Many authors of scientific, popular, and practical studies have suggested property tax reform that reduces controversy and adapts to the needs of its citizens (e.g., [37,38,39,40,41,42]). Thus, for example, Reeb and Tomson [37] developed, as part of their work, the Advisory Commission on Intergovernmental Relations (ACIR), and twenty-nine suggestions for reforming the property tax of the US government. Here are some of the suggestions, among others: reduce the complex classifications used to define the tax; eliminate self-assessment of the personal property tax; publishing complete information about tax-exempt property; increase the professionalization of the state agency that administers the property tax; the division of assessment responsibility between state and local agencies should be clear; establish education curriculum for the training of assessors; work with the Census Bureau to improve property tax data; and provide taxpayers with a quasi-judicial review of their grievances, ample information about their rights and their taxes, and a separate court and a small claims division for appeals of local decisions. Considering the above suggestions, it is worth noting that Ireland’s residential property tax was introduced in 2013, which is an exception and distinctive. The significant trade-offs involved in property tax reform in the Irish case were a matter of emphasis, whether one preferred a revenue mobilization measure over one aimed at housing activation, speed over accuracy, simplicity over sophistication, for collection over valuation, and voluntary compliance over punitive sanctions, which combined to produce a residential property tax that was generally accepted by both politicians and taxpayers [28].

However, it should be stressed that finding an ideal, sustainable tax system is tough and, indeed, there is no universal system suitable for all [43]. In assessing a tax system’s efficiency, the critical criteria are economic efficiency, equity (fairness), transparency, collectability, and contribution to income generation. Nowadays, global discussions of the taxation system have become tongue-in-cheek. The world’s most influential organizations, such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations (UN), and the World Bank Group (WBG), have argue that it is the current responsibility of all governments around the world to strengthen and increase the efficiency of their tax systems to generate the domestic resources necessary to achieve the Sustainable Development Goals (SDGs) and promote inclusive growth (2023). The problem is that the information about changing the tax system from re-guard is associated with reluctance and public resistance. According to many authors (e.g., [36]), the amount and form of the tax burden imposed does not always find social acceptance. Attitudes towards introducing a new tax or changes to the existing tax system are derived from an assessment of one’s situation at present in comparison with earlier periods, and reflect one’s situation in comparison with that of other people.

The literature has attempted to define a sustainable tax and a sustainable tax system, and to propose their classification and evaluation criteria [27,44]. A sustainable tax is a financial burden contributing to sustainable development, i.e., to simultaneously achieving fundamental (economic, socio-cultural, and ecological) and administrative goals [45,46]. The Economics of Sustainable Development (ESD) favors the welfare of the whole over the welfare of the individual, and the satisfaction of moderate profit over the pursuit of profit maximization [47]. Therefore, ESD allows for tax increases as long as this does not worsen the poorest situation and the funds raised are used to create substantive goods.

In this article, we propose that the taxpayer be put at the center when looking for the perfect property tax system. As mentioned earlier, the taxpayer must believe in paying this tax and have a sense of fair collection. “Fairness” is a relative and uncertain concept [48]. Tax justice is a very subjective concept, and most people feel the need to share the results of their interactions with the state as a personal injustice. To obtain a sense of meaning, tax awareness among the public is needed. A lack of knowledge from reliable sources reinforces resistance to paying taxes. Resistance in the taxpayer grows if the state appropriates their income without telling them what it is being used for, or when, in the public’s perception, it is used contrary to its designation or previous election promises. In this context, the present time is ideal for a moment of reflection on several areas [49]. A land tax could be designed according to local circumstances to avoid drastic changes. For example, in places with dynamic land values, i.e., near urban areas where rapid development is taking place, unit taxes may, in the long run, undervalue location values and raise equity concerns [50]. One of the key elements of a successful property tax system is its ability to promote the more efficient use of land resources and structures. This leads, according to [51], to several important benefits: “The most important reasons for a real property tax are the need for more rational use of land resources and structures, property rights, and the assurance that assets accrue to owners who can use them most effectively. Such a tool allows the revival of the real property market and leads to the divestment of the existing real property ownership by those who do not pay a tax and who do not use it maximally or best. In addition, the tax aims to eliminate, or at least significantly limit, the purchase of property for speculative purposes” [51].

The careful management of the timing of property tax reform (assessment ratio or rates) and appraisal procedures can prevent a simultaneous increase in the different factors affecting the tax bill. However, establishing formal and transparent land rights through a land registry has several co-benefits worth mentioning. Growing empirical evidence shows that secure land rights increase agricultural investments and sustainable land use practices [52,53,54]. Further benefits include improved land access for women [55], improved educational outcomes for children [55], and reduced deforestation [56]. Because of the various benefits, establishing tenure rights has become an objective of governments and international organizations (FAO 2012) [57], independent from its instrumental role in tapping an additional source of government revenue. A sense of fairness and proper redistribution can be reinforced by explaining to taxpayers how their property tax contributes to sustainable development, especially in land use and local living conditions. Voluntary compliance can be encouraged by providing education and services to ensure taxpayers understand the rationale for property taxation and its connection to funding essential public services, and their responsibilities and rights under the property tax law [37]. Aligning the specific tax design, i.e., the definition of the tax base, the tax rate, and the taxpayer (owner, tenant, and beneficiary) [58], with a broader sustainability agenda—including long-term economic, social, and environmental goals—can provide further support for these initiatives. Moreover, property taxes not only boost revenue but also enhance the fiscal contract between the state and its citizens, promoting civic culture and voluntary tax compliance [25]. A well-structured property tax system can improve transparency and accountability in public spending, fostering a sense of shared responsibility and trust between taxpayers and the government.

This article presents an alternative approach to designing a property tax system that emphasizes the principles of good governance, honest governance, and acceptance governance. Such a system is fundamentally based on cooperation, participation, and a shared sense of responsibility for the common good, which supports the development of an antifragile society and raises the standards of sustainability and fairness.

3. The Concept of Antifragility from the Perspective of a Sustainable Property Tax System—Background to the Authors’ Proposed Concept

The authors consider it crucial to design and maintain a property tax system that avoids evoking negative associations, and is perceived as a harbinger of positive changes that support its full implementation. This presents a particular challenge, as it appears to be entirely unrealistic. By its very nature, a tax system elicits concern, a sense of threat, and even anger among property owners and users. Incorporating the concept of antifragility into the perspective of a sustainable property tax system aims to address these issues, fostering resilience and positive perceptions. This approach aligns with sustainability rules, ensuring economic stability and social equity.

The word “sustainability”, according to the Cambridge Dictionary, means “the idea that goods and services should be produced in ways that do not use resources that cannot be replaced and that do not damage the environment”. Initially, this definition referred to the ability of ecological systems to maintain their integrity over long periods. However, today, the concept has significantly expanded. Sustainability now refers to striving for a balance between ecological, social, and economic aspects, ensuring that the needs of the present generation are met without compromising the ability of future generations to meet their own needs. Translating this definition into practical applications often reveals it to be more of a goal function, frequently taking on an almost utopian character due to the difficulty of its implementation. It refers to maintaining a balance that, in practice, always involves prioritizing certain pillars or aspects. Currently, individuals’ social situation and well-being have become highly prominent. To relate this to the classic definition and to the pillars of sustainable development, we can refine and breakdown this definition into its representative pillars: ecology and the environment—preserving the current state and developing local spaces; economy—sufficient/meaningful revenue and not overly burdensome expenses; society—taxpayers, local authorities, residents, government, and politicians—and their needs.

In order to comprehensively present our proposed solutions, it is worthwhile to refer to the timeless statements of authors whose works remain relevant and significant despite the passage of centuries. Tiberius Caesar (42 BCE–37 CE), a Roman emperor, observed the following: “It is the duty of a good shepherd to shear his flock, not to skin it”. These words emphasize that those in power should act in the best interest of their citizens, ensuring their well-being rather than subjecting them to unnecessary suffering. Similarly, the contemporary politician and commentator J.C. Watts, Jr. expressed a related sentiment: “Death and taxes may be inevitable, but they shouldn’t be related”. This statement highlights the need to separate the burden of taxation from the most challenging aspects of human life, such as death, suggesting that financial burdens should not exacerbate existential difficulties.

Even more pertinent in this context is the assertion by Jean Baptiste Colbert (1619–1683), the French Minister of Finance, who said the following: “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing”. Colbert pointed out that effective tax collection requires minimizing social resistance to avoid disrupting social and economic harmony. Therefore, an essential aspect of tax policy should not only be a reduction in the above-mentioned metaphorical “hissing” or social resistance, but also ensuring that the “feathers” taken will grow back healthier and more abundant. This implies that taxes should support society’s long-term development and prosperity rather than weaken it. There must be a balance.

In this context, taxes are a response to what constitutes a perfect and consensual property tax in contemporary times. The foundation of this concept lies in harmoniously combining the state’s fiscal needs with the principle of minimizing social burdens, which ultimately contributes to sustainable and healthy economic growth. We argue that this approach aims to create a tax system that fosters the development of a taxpayer profile resilient to change (as a representative model for the local community), taking into account the specific characteristics of a given area and the neighborhood of the property. The proposed approach aims to identify the features of a tax system that minimize social resistance to fiscal burdens and promotes society’s long-term development and prosperity.

A central element of this concept is the development of an antifragile taxpayer profile, characterized by resilience to economic shocks and the ability to benefit from the dynamic changes and unpredictability present in political and economic environments. An antifragile taxpayer can survive unexpected crises and use them as opportunities for adaptation, innovation, and growth. In this way, the tax system becomes a tool supporting socio-economic flexibility and resilience, contributing to sustainable development and stability.

“Antifragility”, introduced by Nassim Nicholas Taleb [59], refers to entities and organizations that thrive under uncertainty and stress. Taleb’s thesis is that “in a volatile world with much destructive uncertainty, the wise economic strategy is to be antifragile”. However, it must be emphasized that Taleb’s original idea assumes that while the modern world is full of fragility—stemming from debt, technology, and economic and political uncertainty—individuals may make themselves antifragile at the expense of society or other people. This theory aims to illustrate its components clearly.

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Skin in the game [60]—anyone making forecasts or economic analyses should have something to lose, considering that others rely on these forecasts, which introduce risk.

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Via negative—what to avoid or not to do to improve the quality of one’s life, eliminating actions and elements that may have a negative impact;

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Lindy effect—Technology or any non-perishable item increases its expected lifespan with each passing day. This principle underscores durability and resilience, and existing technology is often more valuable than new, uncertain innovations [59]. The opposite of this is neomania [61,62].

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Barbell strategy—This is an approach that combines two extremes: one safe and one speculative. This approach is more resilient than a “monomodal” strategy, which focuses on a single approach. The barbell strategy balances stability and potential gains from risky but potentially highly profitable actions, ultimately leading to antifragility [63,64].

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Green lumber fallacy—Mistaking essential knowledge for less visible and less understandable information. The essence of this mistake lies in the fact that people sometimes focus on the wrong things due to an issue’s complexity, thus failing to grasp it intellectually [62].

A significant element of this discussion of antifragile systems is Taleb’s criticism of Nobel laureate Joseph Stiglitz’s approach to risk and economic predictions [65]. Taleb argues that economists like Stiglitz based their actions on overly simplified models that do not account for the actual complexity of the economy. According to Taleb, such an approach is dangerous because it leads to policies that increase economic systems’ fragility rather than strengthen them. In his critique, Taleb presents three main arguments: ignoring unpredictability, trusting mathematical models, and having a limited perspective, particularly an insufficient consideration of diversity and variability in the global economy.

Taleb concludes that for economic systems to be antifragile, they must be capable of adaptation and benefit from unpredictable events rather than reacting to them in ways that lead to destabilization. Therefore, an antifragile approach to the economy requires greater flexibility, less central planning, and a deeper understanding of the complexity and variability of global systems.

The concept of antifragility has been applied in many domains: physics, risk analysis [63,66], molecular biology [67,68], transportation planning [69,70], engineering [71], aerospace (NASA) [72], megaproject management [73], and computer science [74,75]. Computer science has structured a proposal, an “Antifragile Software Manifesto”, to react to traditional system designs.

The central idea is to develop antifragility by designing and building a system that improves on the environmental inputs. The concept of antifragility extends beyond theory, influencing practical approaches to designing and managing systems across various industries. Understanding and implementing this concept can create more resilient and adaptive structures, including developing an optimal and sustainable property tax system.

What Should and Should Not Be Considered a Sustainable and Consensual Property Tax System—The Authors’ Concept of an Antifragile Taxpayer Profile

Within a sustainable property tax context, we aim to create a system that strengthens taxpayers’ connections to their local area, promoting investments and activities that contribute to long-term stability and regional development. This approach aligns with global trends and encourages societies to become more resilient to political and financial uncertainties [60,63]. An antifragile taxpayer in a sustainable property tax system is, therefore, more engaged in local development, which contributes to an increase in property values (a significant asset for any individual) and an improvement in the quality of life in an area. This strategy assumes that appropriately structured tax burdens can stimulate proactive behaviors, such as investments in property, infrastructure improvements, and support for local initiatives, thereby creating a more resilient and dynamically developing community.

We argue that ensuring the smooth implementation of tax reforms and their contribution to the long-term stability and resilience of the community requires addressing a crucial mechanism: announced tax changes, which, often fueled by clickbait media, can escalate concerns into fear of an excessive tax burden. A sufficiently long-fueled fear is easily transformed into anger (passive and active), expressed in emotionally charged opposition. A simplified visualization of this mechanism is shown in Figure 1.

This mechanism can apply to changes in any tax, as any tax constitutes a burden, reduces disposable income, and thus changes the taxpayer’s financial situation. The current study builds on this foundation by proposing a novel approach to property tax management that incorporates the principles of good governance, aiming to foster a resilient and socially cohesive community. The integration of consensual governance practices into property tax reform, as evidenced by the literature, suggests that stakeholder involvement and transparency can significantly enhance the adaptability and sustainability of the tax system, thereby contributing to long-term economic stability and sustainable regional development. The same chain reaction (Figure 1) as that concerning property taxes can be observed.

Building on this understanding, this article identifies the characteristics of a property tax system that enables the creation of a sustainable, fair, and taxpayer-oriented framework. This, in turn, is intended to shape an “antifragile” taxpayer profile, ultimately fostering a new awareness among a community that they are resilient to shocks and changes. To achieve this effect, the tax system should be transparent, fair, responsive to taxpayers’ needs, and flexible in the face of changing economic and social conditions. The concept of a sustainable property tax system is presented in Figure 2. This framework was developed based on an in-depth literature review, interviews with experts, organizational reports, and international conferences (see [3,7,11,21,22,25,27,42,49,58,59,62,64,65,68,70,76,77,78,79].

The property tax system identified as a “faulty model” contains, we argue, the characteristics indicated in Figure 2. This is justified by the fact that a property tax model based solely on the area parameter overlooks vital aspects, such as property value and tax fairness, i.e., an equality in the tax burden corresponding to payment ability and fairness in the application of regulations. An excessive bureaucracy and the lack of free and simplified options for appealing decisions complicate the tax process and can lead to resident frustration. Complex and intricate tax procedures make the system difficult for taxpayers to understand and navigate. A lack of predictability in the tax system generates uncertainty regarding future financial obligations. This system insufficiently protects against tax abuse and fails to consider particularly tax-sensitive social groups, which can lead to social injustice. Moreover, the absence of mechanisms for controlling and verifying the efficiency of tax fund utilization can result in financial waste and ineffective social development. We argue that the perfect model should possess characteristics that facilitate the creation of a so-called “antifragile” community. The features of a sustainable property tax system that lead to the development of an antifragile taxpayer profile include the following:

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Transparency—information about the amount/value of the tax base and the allocation of paid taxes are easily accessible.

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Simplicity and understandability—understanding tax regulations does not require specialized knowledge.

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Flexibility—adaptability to the changing conditions of taxpayers.

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Fairness/justice—taxes are levied relatively equally, ensuring that people with similar financial capabilities pay identical amounts.

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Socially inclusive—the creation and modification of the tax system involve systematic public consultations.

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Stability—the system is predictable and reliable, with tax changes not being too frequent or sudden, providing taxpayers with financial planning certainty.

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Based on property value—the tax base reflects the property’s appraised value, ensuring that taxes are proportional to the actual market value of the assets.

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A system based on the democratic election of tax authorities by taxpayers—Taxpayers systematically evaluate local authorities through regular surveys, audits, and public consultations. Negative evaluations result in official reviews, leadership changes, or accelerated elections.

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Caring for the most economically vulnerable social groups—necessary relief and support for the most vulnerable social groups.

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Adapting to demographic trends—the system considers changing demographic structures, such as an aging population or migration, and adjusts accordingly.

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Taxpayer services tailored to the local social structure—The system caters to diverse social needs, providing easy access to information and support for all social groups, ensuring easy access to tax information and support tailored to particular persons. The system also offers various communication channels.

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Programs and relief for environmentally conscious property owners—this means that the tax system should support and promote pro-environmental activities by offering relief to property owners who invest in environmentally friendly solutions or other initiatives that improve the quality of life for the entire local community.

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Reducing social disintegration—the system supports social cohesion, eliminates conflicts, reduces inequalities, and promotes equal access to resources and public services.

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Effective taxpayer-oriented tax administration—it utilizes electronic methods for filing applications and foresees exemptions from tax obligations in the case of small amounts.

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Uniform appeal procedures—all appeal procedures and deadlines related to the property tax system are uniform across the country.

We argue that such a system can contribute to building a more integrated (cohesive) local community that is more resilient to economic and social crises. A sustainable property tax system that embodies the characteristics of an antifragile taxpayer is as follows:

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Transparent—taxpayers are more aware and prepared for future obligations, increasing their resilience to unexpected changes.

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Simple and understandable—reduces the stress associated with tax filings, allowing taxpayers to manage their finances better.

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Flexible—taxpayers can better withstand economically tricky periods due to adjusted allowances and deferred payments.

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Fair– builds a sense of social justice, thereby increasing trust in the system and social stability.

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Socially inclusive –meets taxpayers’ needs, increasing their engagement and acceptance.

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Stable—taxpayers can plan their finances long-term, increasing their sense of security.

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Property value-based—fair and proportionate tax burden that taxpayers can understand.

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Based on governance and tax administration choices—allows taxpayers to feel in control of the situation and not just subjected to it.

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Caring for the most vulnerable social groups—reduces taxpayers’ susceptibility to crises and builds security.

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Adapting to demographic trends—supports taxpayers’ long-term stability and fosters community ties.

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Taxpayer services tailored to the local social structure—facilitates management of tax obligations and enhances resilience.

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Programs and incentives for environmentally conscious owners—increases taxpayers’ awareness and engagement, fostering community bonds and identity.

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Reduces social disintegration—builds a stronger, more integrated community, leading to empathetic, cooperative taxpayers.

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Tax administration efficiency oriented towards taxpayers—increases transparency and ease of fulfilling tax obligations, strengthening inclusiveness and taxpayer trust.

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Uniform appeal procedures—increase equal opportunities for fair treatment and effective financial management, giving taxpayers a sense of certainty and justice.

The rationale behind introducing such a system, as proposed here, is based on the belief that it can significantly contribute to building a more integrated and resilient local community, capable of withstanding economic and social crises. A property tax system designed with transparency, fairness, and flexibility at its core not only enhances social cohesion but also strengthens the overall resilience of a community.

Such a system inherently strengthens the bonds within a community by making taxpayers feel more engaged and involved in the tax process. When the process is perceived as fair and participatory, it fosters trust between citizens and local authorities, which is essential for social cohesion. This trust promotes a shared sense of responsibility and mutual support, reducing the likelihood of conflict and increasing a community’s resilience to economic and social challenges. Additionally, by allowing for flexibility in tax payments and offering relief during economic downturns, the system can help individuals and communities not only withstand economic disruptions, but also adapt and thrive in response to them. Moreover, a property tax system aligned with the principles of antifragility encourages local investment by reassuring taxpayers that their contributions directly benefit the community. This leads to improved property values, better public services, and stronger local economies, which collectively contribute to a more resilient community. Finally, by emphasizing inclusivity and support for the most vulnerable segments of the population, this system ensures that all community members can contribute to and benefit from local development. This approach reduces social disparities and enhances a community’s ability to weather social and economic challenges.

Such a system consequently yields tangible benefits for the entire society. The strategic benefits stemming from the establishment of such a proposed system for the whole society, in the context of shaping a resilient taxpayer profile, include the following:

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Delivering complementary information about properties nationwide—establishing a property tax system based on property values enables the collection of detailed data on the real estate market.

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Providing stable funding for local spaces—Ensures a stable and predictable source of income for local governments. This allows them to plan for long-term investment projects, such as expanding road infrastructure, modernizing schools, or developing healthcare services.

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Faster, dedicated, and stable development of local spaces—facilitates the more efficient allocation of funds for regional development areas by enabling local governments to respond more swiftly to community needs and execute investment projects.

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Rotation of incompetent local authorities—Effectively increases the financial transparency of local authorities. Access to income and expenditure data enables communities to monitor their actions. As a result, citizens can exert pressure on local authorities and effect changes in cases of incompetence or abuse. The rotation of incompetent local authorities contributes to more efficient management and improvement of the quality of public services.

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Enhanced efficiency of spatial planning and sustainable urban–rural development—Access to current property value data allows local governments to determine investment priorities and to use resources more efficiently and precisely. This, in turn, contributes to the balanced development of urban and rural areas, minimizing adverse effects, such as environmental pollution or inadequate infrastructure supply.

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Improvement of residents’ quality of life through better tax-funded public services—larger and more stable local government revenues enhance public services such as education, health, transportation, and security, directly impacting citizens’ quality of life.

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Increased security through the enhanced transparency and fairness of property transactions—better transparency in the real estate market minimizes the risk of fraud, manipulation, and speculation, fostering citizens’ trust in the system and supporting economic stability.

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Protection of environmental and cultural values—the tax system can incorporate the protection of green areas and culturally valuable sites, supporting the preservation of national heritage.

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Raising ecological awareness and promoting sustainable lifestyles—The tax system can incentivize property owners to invest in environmental technologies, such as solar panels, rainwater harvesting systems, and thermal insulation. This improves buildings’ energy efficiency and educates society about the benefits of sustainable living.

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Introduction of estate management education programs—The tax system can support educational programs for property owners that teach responsible asset management, financial planning, and investment. This can lead to greater financial stability for citizens and reduce the risk of indebtedness.

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Stimulating sustainable development in rural areas and small towns—The tax system can support sustainable development in rural areas and small cities through infrastructure, education, and public services investments. This helps to reduce disparities between urban and rural areas and promotes balanced national development.

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Creating local public–private partnership networks—Stable tax revenues enable local governments to establish partnerships that invest in local infrastructure and services. Such collaborations can accelerate projects and directly improve residents’ quality of life.

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Increasing country attractiveness for foreign investors—A transparent and stable property taxation system can attract foreign investors seeking secure and predictable markets. This leads to increased investment and job creation and enhances the country’s competitiveness internationally.

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Fostering a conducive environment for developing creative communities—A tax system that promotes responsible property management can stimulate the development of artistic and cultural neighborhoods. This can attract creators, artists, and innovators who can contribute to the community’s cultural and intellectual capital growth.

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Stimulating sustainable transport and urban planning—property taxation linked to policies promoting sustainable development, such as tax preferences for properties near public transport or cycling infrastructure, can lead to more eco-friendly cities, reduced pollution, and a higher quality of life.

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Creating models of community housing/local spaces (small homeland as an answer to changing social needs)—The tax system can promote the creation and development of community housing that addresses contemporary social needs, such as shared housing for seniors, intergenerational housing, or cohousing. This can lead to greater social solidarity and improved quality of life for diverse social groups.

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Integrating housing policy with health policy—Property taxation can promote a healthy lifestyle, for example, through tax incentives for properties with recreational spaces or buildings meeting specific health standards. This can lead to improved public health and reduced healthcare costs.

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Stimulating local production and trade and supporting local startups—The tax system can support the development of local markets and small businesses, for example, through tax preferences for properties used by local producers and sellers. This can contribute to local economic growth and sustainable community development. The tax system can incentivize startups and small businesses, promoting local entrepreneurship. Supporting innovative companies can create new jobs and increase a region’s innovation and overall economic growth.

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Improving cities’ adaptability to climate change—The tax system can finance projects to adapt to climate change, such as building green roofs, rainwater retention systems, and city parks. This can increase cities’ resilience to extreme weather events and improve residents’ quality of life.

4. Critical Discussion of Proposed Solutions: Authors’ Perspective

Implementing a sustainable and consensual property tax system will be a significant accomplishment, and a necessary step for ensuring long-term societal resilience. The proper management of the introduction of a consensual property tax necessitates the relinquishing of authoritarian power by government representatives, implying a significant reduction in their “power-over” in favor of shared “power-with” authority. This shift requires a new approach that prioritizes listening to and considering the community’s opinions, which can be complex and difficult [78,79,80]. Government officials must acknowledge the perspectives of the opposing side, even if these viewpoints may not appear constructive, and the proposals and expectations often seem unrealistic or impossible to fulfill. This dynamic introduces a significant challenge, as government representatives may encounter proposals that conflict with their expectations, compelling them to consider solutions they disagree with [58].

Implementing consensual solutions is challenging because unilateral policy development and implementation are more straightforward, albeit requiring waiting until opposition subsides or manipulated acceptance is achieved. Additionally, the community may be reluctant to take collective responsibility, being guided by individual viewpoints and concerns about personal property and comfort [25]. Community passivity is also common—individuals do not engage in the process, participate in consultations, or attend meetings. A lack of trust in the previous, arbitrary government representatives, and the inability to manage property tax policy in a new manner pose additional challenges. Furthermore, officials may be perceived as unfriendly and incompetent if they cannot deal with people in a friendly, helpful, and dialogue-based manner. This lack of trust and engagement further complicates the shift towards a consensual property tax system [59].

There is also a temptation to revert to old management methods in case of failures. Impatience when waiting for the effects of new techniques and a lack of conviction among government representatives regarding the correctness of implementing new approaches to local tax policy also hinder the introduction of consensual property tax. Moreover, the community may not be sufficiently mature to actively shape tax policy, being accustomed to autocratic management, which constitutes a fundamental challenge to introducing a consensual property tax.

Resilience requires specific prerequisites, such as a stable political environment and financial stability, which are essential to societal functioning. Vital to building a society’s resilience against threats stemming from instability in these spheres is the implementation of a perfect and consensual property tax system. The tax system should be viewed as a structure organized around a dominant idea and policy directions, encompassing legal, economic, and functional terms. As previously noted, property taxes constitute a particular type of historically shaped public levy of a monetary nature, and play an essential role in economic and social processes. Particularly for local budgets, they represent a significant stream of revenue used to finance public infrastructure, thereby improving the living conditions of residents within a given territory.

The tax rates, methods of determining the tax base, and compliance with tax laws are the primary factors determining the economic impacts of a tax system. Therefore, the structure of property tax systems is influenced by the various factors that constitute its environment. These include historical traditions, political factors, socio-economic factors, and administrative considerations. Each factor encompasses specific conditions that affect the intensity (scale) of a taxpayer’s dissatisfaction with or acceptance of a tax. Some of these factors are illustrated in Figure 3.

Figure 3 shows that the local property taxation system constitutes too important a segment of the public finance sector to undergo changes of a random and piecemeal nature.

Tax systems and managing the implementation of tax policy changes should follow the principles of good governance, i.e., take into account the following:

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Public participation in creating new rules, correcting existing ones, and setting tax rates and thresholds;

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Responsiveness—people working in tax administration at all levels should be well-informed and responsive;

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Sustainability and long-term orientation—tax money should be spent intentionally to ensure the sustainable development of the country and region;

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Efficiency, effectiveness, openness, and transparency—taxpayers should be able to see where their money is going and feel that it is being spent cost-effectively;

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Rule of law—taxpayers should know the clear and transparent procedures for levying and collecting taxes;

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Ethics—the tax system should be designed to prevent corruption;

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Competence and capacity—tax administration should use modern methods, but emphasis should also be placed on the development of soft skills, such as empathy and kindness;

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Sound financial management- tax administration takes part in arrangements for solidarity, the fair sharing of burdens and benefits, and reduction in risks (equalization systems, cooperation, and mutualization of risks);

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Human rights, cultural diversity, and social cohesion—within the tax administration’s sphere of influence, human rights are respected, protected, and implemented, and discrimination on any grounds is combated;

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Accountability—tax decisions are reported on, explained, and can be sanctioned.

The conditions related to political strategies for developing and introducing tax laws often involve the necessity of seeking parliamentary majorities, which typically require far-reaching compromises [58]. The interrelations between the tax system and the revenue subsystems of local governments should be considered. These systems intertwine and interact with each other in various ways. This relationship is particularly crucial because property taxes constitute a significant portion of municipal budgets [25]. Local governments often determine the tax rates and collect revenues. In many Member States, municipalities can set the final rates for recurrent property taxes and collect the associated revenues. National tax laws typically establish maximum and minimum tax rates.

Due to varying land use structures, local units (e.g., municipalities) are categorized into richer and poorer ones. Wealthier municipalities, with a predominance of investment and urbanized land within their administrative boundaries, impose higher property tax rates. Conversely, poorer municipalities predominantly feature agricultural and forested land, and are taxed at lower rates. By appropriately adjusting property taxation to meet the needs of local communities and by promoting investments that support regional development, a balanced property tax can mitigate the adverse effects of economic and political instability, thereby creating stronger societal foundations.

Improving the stability and development of a region, supported by investments financed from tax revenue, contributes to increasing an area’s attractiveness for potential property buyers. Property values may rise as the quality of life and local infrastructure improve, benefiting property owners and the local community. Moreover, this improvement may discourage property sales and relocation to other areas, driven by the increased monetary value and the enhanced comfort of living in such a local space.

Therefore, a sustainable property tax stimulates economic and social development, ultimately preventing the depopulation of previously unattractive areas. When designing a sustainable and fair tax system, adhering to accepted valuation rules is essential, as they equally protect the interests of various public and private entities. This research demonstrates that ensuring fairness in property tax valuation is crucial for building trust and maintaining a system’s sustainability [59,60]. However, achieving this requires significant administrative and implementation efforts, particularly regarding mass appraisals and updating taxable items’ values.

Modern, widely available technologies for storing and processing data of various origins and formats enable the precise and time-efficient analysis of large datasets, which is applicable to mass appraisal tasks. By utilizing these technologies, such as machine learning and artificial intelligence, it is possible to detect subtle patterns, behaviors, and dependencies in the real estate market that would be difficult to identify using traditional methods. This could significantly reduce the high costs associated with mass appraisals and updating of property values, leading to more accurate and fair valuations from the recipients’ perspective. Given these advantages, the estimated value for tax purposes should be considered for other uses, such as credit or official purposes.

It is also important to recognize that today’s society, including taxpayers, consists of diverse generations with differing attitudes toward authority and governance. Baby boomers, millennials, the assertive Generation Z, and the prosperity-raised Generation Alpha all have distinct expectations regarding participation, transparency, and fairness. These generational differences must be considered when designing a property tax system that aims to be both sustainable and consensual [61]. Ultimately, decision makers must recognize that designing a sustainable and consensual property tax system requires not only addressing the diverse expectations of different generations, but also establishing effective tools with which to protect taxpayers’ rights and fostering an environment that encourages active taxpayer participation and development.

5. Conclusions

The significant contribution of this article is to the understanding of how property tax systems can be designed to balance fairness and sustainability, particularly in varying regional and local contexts. This research provides a framework for integrating antifragility into tax policy, offering a novel approach that enhances the resilience and adaptability of communities, which is a crucial advancement in the field of tax system management. Designing a property tax system that maintains sustainability for local governments while ensuring fairness for citizens has always been a complex challenge. Implementing reforms requires strong political will to overcome various obstacles, often in the face of significant social opposition. A medium- to long-term reform strategy aligned with sustainable development principles is necessary.

This study focuses on how to balance these critical objectives while promoting the resilience and sustainability of local communities. The concept of antifragility, introduced by Nassim Nicholas Taleb, is highly relevant in this context. Antifragility refers to systems that thrive and grow stronger when exposed to volatility and stress. This study provides a framework for understanding how legislative will, societal structure, economic conditions, and the ability to predict the consequences of the interactions of legal regulations to create a resilient and adaptive property tax system. Moreover, the hypothesis that consensual approaches and antifragility theory are effective tools for supporting the creation of a sustainable, fair property tax system is verified through this research. The integration of antifragility into property tax management promotes socio-economic stability, creating a system that is transparent, flexible, and just. An antifragile approach can lead to communities that thrive amidst uncertainties, improve residents’ quality of life, and enhance the attractiveness of areas for investors. The “anti-fragile taxpayer” model is expected to develop high social cohesion, increasing the resilience and stability of a community as a whole.

These findings highlight the need for further exploration of how antifragility can be effectively integrated into property tax systems across different regions. Future research should focus on developing mechanisms with which to assess the synergies between elements of the property tax system and its environment, particularly in relation to achieving sustainable development goals in varying political and economic contexts.