Land Value Tax Legality Atlas

What is the LVT Legality Atlas?

The LVT Legality Atlas is a collaborative project between the Center for Land Economics and the Progress and Poverty Institute that examines the legal status of land value taxation (LVT) and split-rate taxation across different states. Our goal is to provide clear, accessible information about where land value taxes are legally permissible and how they can be implemented.

Understanding Land Value Taxation

Land Value Taxation is a tax policy that separates the taxation of land from the taxation of buildings and improvements on that land. Unlike traditional property taxes that tax both land and buildings at the same rate, LVT applies a higher tax rate to land while reducing or eliminating taxes on buildings and improvements.

This approach incentivizes development and discourages land speculation by making it more costly to hold vacant or underutilized land. When implemented properly, LVT can encourage economic development, reduce urban sprawl, and create more affordable housing.

The Uniformity Clause Challenge

Many state constitutions contain "uniformity clauses" that require taxes to be applied uniformly across similar classes of property. These clauses are often cited as barriers to implementing split-rate taxation. The uniformity clause typically states that all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.

However, the interpretation of these clauses varies significantly from state to state. In some states, land and buildings can be legally classified as different types of property subject to different tax rates, while in others, courts have interpreted uniformity to require identical treatment.

Common Workarounds

Several approaches have been used to implement LVT despite uniformity clause challenges:

  1. Universal Tax Abatement: Rather than directly implementing different tax rates, some jurisdictions maintain a uniform tax rate but provide universal abatements (reductions) on building values.

  2. Special Assessment Districts: Creating special districts with different assessment methodologies.

  3. Home Rule Authority: In states with strong home rule provisions, local governments may have authority to implement innovative tax structures.

Current Project Scope

The LVT Legality Atlas is launching with analysis of selected states where we have conducted thorough research. That said, anything on the atlas is not legal advice, and we encourage you to reach out if you are working on land value taxes in your area. We plan to expand our coverage over time as resources permit. States currently: 

If you're interested in learning about the legality of land value taxation in a state not currently covered in our atlas, please email greg@landeconomics.org.