How to Enact Land Value Taxation
Land assessments are often assessed lower to market value than buildings in violation of existing law, so obey the law by assessing them both at the same ratio to market value. Levy a higher tax rate on land assessments than on building assessments. Reduce building assessments. No property owner should pay more than 3% and the BLS inflation rate over what was paid in the previous year.
We have 24 real-world victories (with maybe 60 LVT extensions) of HGFA/CSE which provide solid evidence that immediate fiscal year implementation works.
Land-heavy speculators will oppose LVT and seek to influence voters by concentrating on what will happen to them in the 5 or 10 years and not on what the council or legislature can do now, which is to set land tax rates for the coming fiscal year.
How to Enact Land Value Taxation
(1) Land assessments are often assessed lower to market value than buildings in violation of existing law, so obey the law by assessing them both at the same ratio to market value.
(2) Establish a two-rate property tax – Levy a higher tax rate on land assessments than on building assessments, using these formulas: (1) PBTR (proposed building tax rate) = 80% x CBTR (current building tax rate); a percentage other than 80% can be used; decrease it in later years. (2) PLTR (proposed land tax rate) = CBTR – PBTR, x BA/LA, + CLTR (current land tax rate). BA is total building assessments and LA is total land assessments. Alternatively, use this formula PLTR = Revenue – (BA x BTR)/LA.
(3) Reduce building assessments (perhaps by 20% or by $20,000) but not land assessments, to be paid for by a property-tax increase (preferably on land only) in order to achieve revenue neutrality. Most property owners would pay less because their credit will exceed their higher property tax. All renters (both residential and office) will pay less in the long run since the land tax can’t be passed on to them (on this, read any economics text) and while the building tax can be passed on to them, it will be less.
(4) Establish a separate property tax on land assessments only in order to provide revenue to pay for a new expense or to reduce either the regular proper tax or some other tax. Most people will then get a tax decrease.
No property owner should pay more than 3% and the BLS inflation rate over what was paid in the previous year.
Steven Cord, PhD
Research Director
Enabling Legislation for Maryland
Enabling Legislation for Virginia
PA Chapter of the American Planning Association
