Land Value Tax - Core Insights

John Pattison
John Pattison
  • Updated

A land value tax is a tax that is assessed on the value of a piece of land, rather than the value of the buildings that sit on it. Under a land tax, you are effectively taxed on the value of your location, which is mostly a result of what is nearby.

In contrast, in most American cities, property taxes are assessed on both land and buildings (“improvements”). Taxing improvement value acts as a disincentive to put land to productive use—since by increasing the value of your building, you will also increase your tax liability—and encourages land speculation. Taxing only land, or mostly land, helps resolve these issues.

Land is a community’s most precious resource. It is the base upon which our cities’ prosperity is built and sustained, and it must not be squandered.

But the property tax system in most U.S. cities encourages the wasteful and unproductive use of land. By taxing building improvements, we punish people who improve their property with higher taxes—and we reward speculators and slumlords, who can afford to let precious land sit idle or fall into disrepair.

Switching to a land tax can help us build stronger, more financially resilient communities.


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