Land Value Return
Land value is determined by the community—the people that live there, the streets maintained by the city, and the public and private infrastructure investment. By shifting taxes to the value of land, often referred to as land value tax (LVT) shifts, land value can be returned to the community that makes it valuable. LVT shifts are a proven method to spur urban development and to maintain fiscally-resilient cities.
States Across the Country Are Considering
Shifting Taxes to Land
Land Value Tax Legislative Tracking
Why Shift Taxes to Land?
Property taxes punish development.
Every new building, new unit, and renovation faces higher taxes. Meanwhile, landowners can speculate on vacant or underutilized land as value appreciates. We must find a way to align incentives, so landowners are encouraged to build and discouraged from idleness.
We can split property taxes.
While keeping revenues neutral, we can split the property tax into two components:
One on land
One on improvements to the land
Improvements will be valued based on the buildings and other development on top of the land. Land will be valued solely based on location. Location in urban centers has higher demand, and therefore higher prices.
Shifting the burden onto land aligns incentives.
Reward productivity, discourage passivity.
By decreasing the rate on improvements, landowners can develop bigger and better. By offsetting decreased revenue through an increased rate on land, landowners will profit less from idleness, encouraging land to be put to good use.