I feel like this is already possible through homestead exemptions. You can even extend this to higher density rental complexes (more incentive for an apartment complex to be fully occupied). Unfortunately this exemption is tiny in some places.
Im not sure how it would be possible to directly outlaw speculation (pretty much anyone who buys a house would be suspect), but LVTs are a way to change the incentive structure of landowning to ensure it can’t occur at all, while also funding the government (or a UBI).
not a tax on property or improvements on the land.
often the idea being you incentivize development because the developed land is taxed at the same or lower rate than undeveloped land.
a conventional property tax taxes the land and the improvements equally. this often disincentivized development because developing the land means paying more taxes.
Development of surrounding land increases land value yes, but the idea is that since the landowner didn’t do that development themselves, they shouldn’t be able to profit from it through increased value of their own land. “Land value” is kind of an amorphous though, another way to think about it is that we want to incentivize the most economically optimal use of land in high demand areas, thus we should tax all land proportional to demand (measured via price) to encourage those landowners who have undeveloped or under-utilized land relative to demand to use it.
(note this is counter-intuitively pro-environmental because it applies most to land with high demand, e.g. cities, not forest or farmland, and if cities can be successfully densified to satisfy housing demand, pressure to sprawl can be reduced, increasing those lands left to nature)
Ok so the idea is we want high density land development to be cheaper relative to low density land development to encourage urban living?
It’s still unclear to me why land value tax vs property tax is different in this scenario.
If the land surrounding an underdeveloped parcel rises in value, so too does the property tax. Do you mean that we should decrease the tax on improvements? I think this can be done with taxation based on things like number of tenants or businesses (less tax for more density). Otherwise you just end up with lower density luxury condos everywhere.
And by economically optimal, do you mean optimal for the most people or for the most profit? These often differ.
The other people didn’t mention it, but this comes from the economic school called Georgism. If you want to know more that keyword should help you out.
LAND VALUE TAX
Legally disallow speculation on human needs.
I feel like this is already possible through homestead exemptions. You can even extend this to higher density rental complexes (more incentive for an apartment complex to be fully occupied). Unfortunately this exemption is tiny in some places.
Im not sure how it would be possible to directly outlaw speculation (pretty much anyone who buys a house would be suspect), but LVTs are a way to change the incentive structure of landowning to ensure it can’t occur at all, while also funding the government (or a UBI).
Isn’t this property tax? Which I believe every state has. There should probably be a larger homestead discount though. It’s nothing where I live.
it’s a tax on land.
not a tax on property or improvements on the land.
often the idea being you incentivize development because the developed land is taxed at the same or lower rate than undeveloped land.
a conventional property tax taxes the land and the improvements equally. this often disincentivized development because developing the land means paying more taxes.
But doesn’t development increase the land value as well? In high demand places the land value is the significant factor in the property anyways.
Development of surrounding land increases land value yes, but the idea is that since the landowner didn’t do that development themselves, they shouldn’t be able to profit from it through increased value of their own land. “Land value” is kind of an amorphous though, another way to think about it is that we want to incentivize the most economically optimal use of land in high demand areas, thus we should tax all land proportional to demand (measured via price) to encourage those landowners who have undeveloped or under-utilized land relative to demand to use it.
(note this is counter-intuitively pro-environmental because it applies most to land with high demand, e.g. cities, not forest or farmland, and if cities can be successfully densified to satisfy housing demand, pressure to sprawl can be reduced, increasing those lands left to nature)
Ok so the idea is we want high density land development to be cheaper relative to low density land development to encourage urban living?
It’s still unclear to me why land value tax vs property tax is different in this scenario.
If the land surrounding an underdeveloped parcel rises in value, so too does the property tax. Do you mean that we should decrease the tax on improvements? I think this can be done with taxation based on things like number of tenants or businesses (less tax for more density). Otherwise you just end up with lower density luxury condos everywhere.
And by economically optimal, do you mean optimal for the most people or for the most profit? These often differ.
The other people didn’t mention it, but this comes from the economic school called Georgism. If you want to know more that keyword should help you out.
Thanks, it’s good to learn. Not sure I agree completely.