The Canadian province of Ontario has found it difficult to get the property tax "right." One reason is that its property tax is not one tax, but two: a tax on residential property and a tax on business. These two taxes differ in their political dimension and economic impact, and in how they are administered. Tax reform has been a particular challenge because the local governments--municipalities, regions, and school boards--depend heavily on property tax revenues compared to other local funding sources.This book examines the broad reform of the Ontario property tax in 1998. The objectives of this reform included introducing a full market value assessment, establishing a property tax system that would be widely accepted, and removing property tax reform from the provincial political agenda. Although the reform effort was lauded by experts at the time, its overall objectives were not achieved. In fact, the new assessment system may have ultimately weakened the role of the local property tax. Good property tax design needs to recognize the important differences between taxing housing and taxing business property. Revenue from the property tax alone is not sufficient for large urban areas to pay for the range and level of public services for which they are responsible. The paths to improving the property tax--for example, abolishing the heavily discriminatory taxation of business property--would leave a major revenue hole in local budgets. The question is how to make up for this gap. The authors consider two approaches to the problem: restructuring education finance and introducing a new form of business taxation, at both the provincial and local levels. Over the past decade Ontario was able to successfully adopt a uniform, province-wide market value assessment system. However, its experience suggests that when reforms in property tax administration are combined with sound reforms in both property tax policy and some aspects of local governance and finance, they are more likely to bring about the desired benefits.Many jurisdictions around the world have been advised to implement major reforms in property taxation to resolve local government finance problems. This detailed evaluation of Ontario's reform in both property tax policy and full market value assessment shows that, while such reforms are possible, they require very careful design, implementation, and sustained follow-up if they are to succeed, especially in large metropolitan areas.