AHC: Widely Implemented Land Value Tax

BigBlueBox

Banned
So all land? Desert, marshland, wilderness areas? Land only has value if it can be monetized?
If for some reason a private property owner feels the need to own desert, marshland, or wilderness then yes. But most of that land is public anyways.
 
For comparison though, 1.19% is the average property tax in the U.S. and I doubt many people would be willing to pay, for example, $5,000 a year on a $100,000 plot of land.

That's close to what homeowners pay in West Lafayette Indiana. Local circumstances make the home owners willing to pay a premium.
 
That's close to what homeowners pay in West Lafayette Indiana. Local circumstances make the home owners willing to pay a premium.

National average is what I'm getting at. Undoubtedly you'll find higher rates in certain localities. Problem is that means a fair number of people won't be interested in what amounts to a tax hike for them, especially given this will be targeting those likely to turn out to vote and make great political ads; middle class families.
 

Deleted member 94680

The way I see it, the property owner wouldn’t have LVT added to their tax burden if they didn’t own the land their property was on (flat owners for instance) but if they owned the land as well as the propert they would pay LVT.

As to whether they would want to pay it, tough. Some land would cost more than others, so some houses would cost more than others.

I also don’t think it’s meant to replace any other tax rather than add to the tax revenue generated for a government.
 

DougM

Donor
The problem is how to establish the actual value of just the land. If you have two plots of land in the same basic location you can use that to determine value but it is hard to determine the value of land in a built up area. If you have an area built up for 75 years then you have no empty land to establish fair market value. So there is no correction mechanism. If you look at property tax we correct the value when it or adjacent similar property gets sold.
It gets worse as an area developers the property goes up in value as it is less available. Thus it is easy for the last plot to sell for 10 times or more what early plots sold for. So all of a sudden the last time land sold it skyrocketed. Now everyone is paying at that high rate. Assuming you adjust for inflation over the year you have high tax value on the property. Now years go buy the neighborhood gets run down and you still have high value to tax the land as no empty land exists.
Then you have a fire in the area. So you now have an empty piece of property and it cells for dirt cheep say 1/100 of that the land is currently valued at and the bottom falls out of the taxes and the local government goes bankrupt.

The alternative to this is for the government to establish an truly abitrary value of land. Then it is not a “Land Value Tax” it is just a “land area tax”

To get a true land value tax that works you would need to build everything mobile. So you can take you house or business or skyscraper and move it off the lot it sits on so the two are sold separately. Like we do in the US with mobile home parks. (Except most parks you don’t own the land). My grandma lived in a mobile home subdivision. Everyone owned the land (and usually had a garage) but the house where alll mobile himes. So in effect she was taxed as if it was a LVT.
 

Deleted member 94680

The problem is how to establish the actual value of just the land. If you have two plots of land in the same basic location you can use that to determine value but it is hard to determine the value of land in a built up area. If you have an area built up for 75 years then you have no empty land to establish fair market value. So there is no correction mechanism. If you look at property tax we correct the value when it or adjacent similar property gets sold.

This has always been one of the core problem of LVT - how do you value the land in a family for generations? Duke Whatever of Wherever has had Thingymahjig Estate in his family for 400 years. His ancestors were 'gifted' the land for a florin after making a load of dead Frenchmen in service to the Monarch. What do you charge Duke Whatever here and now in 2018? 7.5% of one florin (adjusted)?

It gets worse as an area developers the property goes up in value as it is less available. Thus it is easy for the last plot to sell for 10 times or more what early plots sold for. So all of a sudden the last time land sold it skyrocketed. Now everyone is paying at that high rate. Assuming you adjust for inflation over the year you have high tax value on the property. Now years go buy the neighbourhood gets run down and you still have high value to tax the land as no empty land exists. Then you have a fire in the area. So you now have an empty piece of property and it cells for dirt cheep say 1/100 of that the land is currently valued at and the bottom falls out of the taxes and the local government goes bankrupt.

I think the best idea would be to have a valuers department for LVT - Land Assessors that value the land at sale or a set periodicity. There would be room for graft and complaints, but on the whole, by regularly valuing the land, it would ensure the tax remains relevant. The same way your Council Tax band can change depending on reassessment or if you've made improvements to your home.
 
If for some reason a private property owner feels the need to own desert, marshland, or wilderness then yes. But most of that land is public anyways.

A lot of people own swamp or forest. Forest for hunting, or just because they want it. The swamp may just be part of the land. The swamps because they are part of the plot. I have the Damsoggee Swamp, not because I want it, but because it was part of the land I purchased. Would I then be allowed to say, purchase donut shaped pieces of land to avoid the useless part in the middle?
 

Anderman

Donor
I don’t think you understand LVT. All land has some value, even if it is just an empty plot in the middle of nowhere that value is taxed. The building is not. If you have a house sitting on one acre of land and somebody owns an empty acre of land adjacent to your home then both of you will pay the same amount under LVT.

Only if the acre with the building has the same value as the acre of land without the building. Valuation will depend on location, is it in the middle of nowwhere inside of areas befined by zoning laws etc..
 

DougM

Donor
It is hard enough to figure out the correct taxable value of the land and buildings when you have examples being sold in the same area on a regular basis to bass the value off of. But when no land has changed hands in decades and the structures on decades old deciding what part of the $400,000 sales value is the land vs the building is impossible, You are going to end up in court ALL the time.

And you have not explained how to handle the two extremes.
Assuming a building burns down and the property is sold. First time property is sold (without buildings) in 30 years so we are setting the first true market value of property in decades.
Then you get two extreme possibilities (and a ton more between the extremes)
1) The property is in a very popular area and sells for 10 times It assessed value. Next years taxes on everyone in the area just went from $1,000 to $10,000 and you just bankrupt a hundred families.
The other extreme
2) the property sells for 1/100 of assessed value. The following year the City budget drops from $10,000,000 to $100,000 and the City goes bankrupt.
 
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