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0 pointsmlyle3y ago0 comments

But the idea with a land value tax is you tax the value of the land, and not any property on it. So it's not just improvements added in a year, but any improvements residing on the property.

If the land is worth $100, and your house is worth $200-- it's worth $300 to you. But a LVT should just be taxing that $100.

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brigandish3y ago

There are two kinds of improvements, those of the land itself (like a new road or a water pipe etc) and those like houses or businesses. LVT directly includes the former, as they would be included in anyone's assessment of value (whether that be a government assessor or the owner). However, the value of the land is also indirectly linked to the improvements like houses. If you make a piece of land more productive by building on it then the land itself becomes more valuable, as will nearby land.

So with either kind of improvement the tax can go up, but LVT still encourages development compared to property tax as undeveloped land will still attract a greater proportion of tax than it would under a property tax.

mlyleOP3y ago

I think you're missing my point. We're in a subthread where you floated the idea of a bidding-based scheme as a way to set LVT land values.

If you set the tax rate by having owners bid a price they're bound to sell their property for... that's going to include improvements like dwellings, since the owner can't take their dwelling with them and doesn't want to just sell the property with their dwelling for the land value alone.

In turn, this fails at setting the rate for a LVT, because it captures the value of improvements like houses in the taxed amount.

brigandish3y ago

In Japan it's reasonably common for someone to own the land while someone else (e.g. a homeowner) owns the buildings on the land and has certain rights to live there that the landlord can't ignore (and hence can't just turf them out suddenly).

Flats in the UK are leasehold, which means you can buy (part of) a property and still not own the land.

It's entirely possible to separate the two.

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brigandish3y ago

mlyleOP3y ago

I think you're missing my point. We're in a subthread where you floated the idea of a bidding-based scheme as a way to set LVT land values.

In turn, this fails at setting the rate for a LVT, because it captures the value of improvements like houses in the taxed amount.

brigandish3y ago

Flats in the UK are leasehold, which means you can buy (part of) a property and still not own the land.

It's entirely possible to separate the two.

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