Land Taxation
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A land value tax (LVT) is a levy on the value of
land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of Earth not submerged by the ocean or another body of water. It makes up 29.2% of Earth's surface and includes all continents and islands. Earth's land sur ...
without regard to
buildings A building or edifice is an enclosed structure with a roof, walls and windows, usually standing permanently in one place, such as a house or factory. Buildings come in a variety of sizes, shapes, and functions, and have been adapted throughout ...
,
personal property Personal property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law (legal system), civil law systems, personal property is often called movable property or movables—a ...
and other improvements upon it. Some economists favor LVT, arguing it does not cause
economic inefficiency In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: * Allocative efficiency, Allocative or Pareto efficiency: any changes made to assist one person would harm another. * Productive ...
, and helps reduce economic inequality. A land value tax is a
progressive tax A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term ''progressive'' refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the ...
, in that the tax burden falls on land owners, because land ownership is correlated with wealth and income. The land value tax has been referred to as "the perfect tax" and the economic efficiency of a land value tax has been accepted since the eighteenth century. Economists since
Adam Smith Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...
and
David Ricardo David Ricardo (18 April 1772 – 11 September 1823) was a British political economist, politician, and member of Parliament. He is recognized as one of the most influential classical economists, alongside figures such as Thomas Malthus, Ada ...
have advocated this tax because it does not hurt economic activity, and encourages development without subsidies. LVT is associated with
Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist, Social philosophy, social philosopher and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of ...
, whose ideology became known as
Georgism Georgism, in modern times also called Geoism, and known historically as the single tax movement, is an economic ideology holding that people should own the value that they produce themselves, while the economic rent derived from land—includ ...
. George argued that taxing the land value is the most logical source of public revenue because the supply of land is fixed and because public infrastructure improvements would be reflected in (and thus paid for by) increased land values. The often cited passage is titled "The unbound Savannah." A low-rate land value tax is currently implemented throughout
Denmark Denmark is a Nordic countries, Nordic country in Northern Europe. It is the metropole and most populous constituent of the Kingdom of Denmark,, . also known as the Danish Realm, a constitutionally unitary state that includes the Autonomous a ...
,
Estonia Estonia, officially the Republic of Estonia, is a country in Northern Europe. It is bordered to the north by the Gulf of Finland across from Finland, to the west by the Baltic Sea across from Sweden, to the south by Latvia, and to the east by Ru ...
,
Lithuania Lithuania, officially the Republic of Lithuania, is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea, bordered by Latvia to the north, Belarus to the east and south, P ...
,
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,
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
, and
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; it has also been applied to lesser extents in parts of
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
,
Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...
,
Mexico Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
(
Mexicali Mexicali (; ) is the capital city of the States of Mexico, Mexican state of Baja California. The city, which is the seat of the Mexicali Municipality, has a population of 689,775, according to the 2010 census, while the Calexico–Mexicali, Cale ...
), and the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
(e.g.,
Pennsylvania Pennsylvania, officially the Commonwealth of Pennsylvania, is a U.S. state, state spanning the Mid-Atlantic (United States), Mid-Atlantic, Northeastern United States, Northeastern, Appalachian, and Great Lakes region, Great Lakes regions o ...
).


Terminology

It is also known as a location value tax, a point valuation tax, a site valuation tax, split rate tax, or a site-value rating.


Economic properties


Efficiency

Most taxes distort economic decisions and discourage beneficial economic activity. For example,
property tax A property tax (whose rate is expressed as a percentage or per mille, also called ''millage'') is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or Wealth t ...
es discourage construction, maintenance, and repair because taxes increase with improvements. LVT is not based on how land is used. Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses. Thus, if landlords passed LVT on to tenants, they might move or rent smaller spaces before absorbing increased rent. The land's occupants benefit from improvements surrounding a site. Such improvements shift tenants' aggregate
demand curve A demand curve is a graph depicting the inverse demand function, a relationship between the price of a certain commodity (the ''y''-axis) and the quantity of that commodity that is demanded at that price (the ''x''-axis). Demand curves can be us ...
to the right (they will pay more). Landlords benefit from price competition among tenants; the only direct effect of LVT in this case is to reduce the amount of social benefit that is privately captured as land price by titleholders. LVT is said to be justified for economic reasons because it does not deter production, distort markets, or otherwise create
deadweight loss In economics, deadweight loss is the loss of societal economic welfare due to production/consumption of a good at a quantity where marginal benefit (to society) does not equal marginal cost (to society). In other words, there are either goods ...
. Land value tax can even have negative deadweight loss (social benefits), particularly when land use improves. Economist William Vickrey believed that: LVT's efficiency has been observed in practice. Fred Foldvary stated that LVT discourages speculative land holding because the tax reflects changes in land value (up and down), encouraging landowners to develop or sell vacant/underused plots in high demand. Foldvary claimed that LVT increases investment in dilapidated
inner city The term inner city (also called the hood) has been used, especially in the United States, as a euphemism for majority-minority lower-income residential districts that often refer to rundown neighborhoods, in a downtown or city centre area. Soc ...
areas because improvements don't cause tax increases. This in turn reduces the incentive to build on remote sites and so reduces
urban sprawl Urban sprawl (also known as suburban sprawl or urban encroachment) is defined as "the spreading of urban developments (such as houses and shopping centers) on undeveloped land near a city". Urban sprawl has been described as the unrestricted ...
. For example,
Harrisburg, Pennsylvania Harrisburg ( ; ) is the capital city of the U.S. commonwealth of Pennsylvania and the seat of Dauphin County. With a population of 50,099 as of 2020, Harrisburg is the ninth-most populous city in Pennsylvania. It is the larger of the two pr ...
's LVT has operated since 1975. This policy was credited by mayor Stephen R. Reed with reducing the number of vacant downtown structures from around 4,200 in 1982 to fewer than 500. LVT is arguably an
ecotax An environmental tax, ecotax (short for ecological taxation), or green tax is a tax levied on activities which are considered to be harmful to the environment and is intended to promote environmentally friendly alternatives via economic incentive ...
because it discourages the waste of prime locations, which are a finite resource. Many urban planners claim that LVT is an effective method to promote
transit-oriented development In urban planning, transit-oriented development (TOD) is a type of Real estate development, urban development that maximizes the amount of Residential area, residential, business and leisure space within Pedestrian, walking distance of public t ...
.


Real estate values

The value of land reflects the value it can provide over time. This value can be measured by the
ground rent As a legal term, ground rent specifically refers to regular payments made by a holder of a leasehold property to the freeholder or a superior leaseholder, as required under a lease. In this sense, a ground rent is created when a freehold piece of ...
that a piece of land receives on the market. The
present value In economics and finance, present value (PV), also known as present discounted value (PDV), is the value of an expected income stream determined as of the date of valuation. The present value is usually less than the future value because money ha ...
of ground-rent is the basis for land prices. A land value tax (LVT) will reduce the ground rent received by the landlord, and thus will decrease the price of land, holding all else constant. The rent charged for land may also decrease as a result of efficiency gains if speculators stop hoarding unused land.
Real estate bubble A real-estate bubble or property bubble (or housing bubble for Residential area, residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom or reduced in ...
s direct savings towards
rent-seeking Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effi ...
activities rather than other investments and can contribute to
recession In economics, a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be tr ...
s. Advocates claim that LVT reduces the speculative element in land pricing, thereby leaving more money for productive capital investment. At sufficiently high levels, LVT would cause real estate prices to fall by taxing away land rents that would otherwise become 'capitalized' into the price of real estate. It also encourages landowners to sell or develop locations that they are not using. This might cause some landowners, especially pure landowners, to resist high land value tax rates. Landowners often possess significant political influence, which may help explain the limited spread of land value taxes so far.


Tax incidence

A land value tax has
progressive tax A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term ''progressive'' refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the ...
effects, in that it is paid by the owners of valuable land who tend to be the rich, and since the amount of land is fixed, the tax burden cannot be passed on as higher rents or lower wages to tenants, consumers, or workers.


Practical issues

Several practical issues complicate LVT implementation. Most notably, it must be: * calculated accurately and fairly (and fairness is always subjective) * high enough to raise sufficient revenue without causing land abandonment, but if land is abandoned, it could be claimed by the State (as occurs under Israel's Absentees' Property Laws) * billed to the correct person or business entity * Political Resistance: Landowners, particularly those with substantial holdings, may oppose LVT due to its potential to significantly increase their tax burden. This resistance can lead to political challenges in implementing and sustaining an LVT. * Effect on Rural Landowners: In rural areas, where land values are lower but the land size per owner might be large, the tax might seem unfair or burdensome compared to urban areas where land values are higher. * Effect on Planning 1: Whereas in a conceptual world LVT drives efficient use of land, extant
planning Planning is the process of thinking regarding the activities required to achieve a desired goal. Planning is based on foresight, the fundamental capacity for mental time travel. Some researchers regard the evolution of forethought - the cap ...
restrictions militate against that efficiency. Moreover when external developments increase the notional land value (by increasing amenity, for instance) existing landowners may object if such a development increased LVT while they are not allowed to realise the benefit. * Effect on Planning 2: LVT in real estate should encourage high-rise building to maximise land-use efficiency. However amenity improvements required for those high-occupant developments are shared unequally across low-occupancy neighbours. * Market Fluctuations: The real estate market is subject to fluctuations, which can lead to significant changes in land values and, consequently, the taxes owed. This volatility can make it difficult for landowners to plan financially. * Economic Impact on Property Development: While LVT encourages the efficient use of land, it could also discourage development in areas where the anticipated increase in land value may not justify the initial investment costs, potentially leading to underdevelopment.


Assessment/appraisal

Levying an LVT requires an assessment and a title register. In a 1796
United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...
opinion, Justice William Paterson said that leaving the valuation process up to assessors would cause bureaucratic complexities, as well as non-uniform procedures.
Murray Rothbard Murray Newton Rothbard (; March 2, 1926 – January 7, 1995) was an American economist of the Austrian School,Ronald Hamowy, ed., 2008, The Encyclopedia of Libertarianism', Cato Institute, Sage, , p. 62: "a leading economist of the Austri ...
later raised similar concerns, claiming that no government can fairly assess value, which can be determined only by a
free market In economics, a free market is an economic market (economics), system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of ...
. Compared to modern property tax assessments, land valuations involve fewer variables and have smoother
gradient In vector calculus, the gradient of a scalar-valued differentiable function f of several variables is the vector field (or vector-valued function) \nabla f whose value at a point p gives the direction and the rate of fastest increase. The g ...
s than valuations that include improvements. This is due to variation of building design and quality. Modern statistical techniques have improved the process; in the 1960s and 1970s,
multivariate analysis Multivariate statistics is a subdivision of statistics encompassing the simultaneous observation and analysis of more than one outcome variable, i.e., '' multivariate random variables''. Multivariate statistics concerns understanding the differ ...
was introduced as an assessment tool. Usually, such a valuation process begins with a measurement of the most and least valuable land within the taxation area. A few sites of intermediate value are then identified and used as "landmark" values. Other values are interpolated between the landmark values. The data is then collated in a database, "smoothed" and mapped using a
geographic information system A geographic information system (GIS) consists of integrated computer hardware and Geographic information system software, software that store, manage, Spatial analysis, analyze, edit, output, and Cartographic design, visualize Geographic data ...
(GIS). Thus, even if the initial valuation is difficult, once the system is in use, successive valuations become easier.


Revenue

In the context of LVT as a
single tax A single tax is a system of taxation based mainly or exclusively on one tax, typically chosen for its special properties, often being a tax on land value. Pierre Le Pesant, sieur de Boisguilbert and Sébastien Le Prestre de Vauban were ear ...
(replacing all other taxes), some have argued that LVT alone cannot raise enough
tax revenue Tax revenue is the income that is collected by governments through taxation. Taxation is the primary source of government revenue. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural reso ...
. However, the presence of other taxes can reduce land values and hence the revenue that can be raised from them. The Physiocrats argued that all other taxes ultimately come at the expense of land rental values. Most modern LVT systems function alongside other taxes and thus only reduce their impact without removing them. Land taxes that are higher than the rental surplus (the full land rent for that time period) would result in land abandonment.


LVT Impracticalities

In some countries, LVT is impractical because of uncertainty regarding land titles and
tenure Tenure is a type of academic appointment that protects its holder from being fired or laid off except for cause, or under extraordinary circumstances such as financial exigency or program discontinuation. Academic tenure originated in the United ...
. For instance, a parcel of grazing land may be communally owned by village inhabitants and administered by village elders. The land in question would need to be held in a trust or similar body for taxation purposes. If the government cannot accurately define ownership boundaries and ascertain the proper owners, it cannot know from whom to collect the tax. Clear titles are absent in many developing countries. In African countries with imperfect land registration, boundaries may be poorly surveyed, and the owner can be unknown.


Incentives


Speculation

The owner of a vacant lot in a thriving city must still pay a tax and would rationally perceive the property as a financial liability, encouraging them to put the land to use in order to cover the tax. LVT removes financial incentives to hold unused land solely for price appreciation, making more land available for productive uses. Land value tax creates an incentive to convert these sites to more intensive private uses or into public purposes.


Incidence

The selling price of a good that is fixed in supply, such as land, does not change if it is taxed. By contrast, the price of manufactured goods can rise in response to increased taxes, because the higher cost reduces the number of units that suppliers are willing to sell at the original price. The price increase is how the maker passes along some part of the tax to consumers. However, if the revenue from LVT is used to reduce other taxes or to provide valuable public investment, it can cause land prices to rise as a result of higher productivity, by more than the amount that LVT removed. Land
tax incidence In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. Economists distinguish between the entities who ultimately bear the tax burden and those on whom the tax is initially imposed. Th ...
rests completely upon landlords, although business sectors that provide services to landlords are indirectly impacted. In some economies, 80 percent of bank lending finances real estate, with a large portion of that for land. Reduced demand for land speculation might reduce the amount of circulating bank credit. While landowners are unlikely to be able to charge higher rents to compensate for LVT, removing other taxes may increase rents, as this may affect the demand for land.


Land use

Assuming constant demand, an increase in constructed space decreases the cost of improvements to land such as houses. Shifting property taxes from improvements to land encourages development. Infill of underutilized urban space is one common practice to reduce
urban sprawl Urban sprawl (also known as suburban sprawl or urban encroachment) is defined as "the spreading of urban developments (such as houses and shopping centers) on undeveloped land near a city". Urban sprawl has been described as the unrestricted ...
.


Collection

LVT is less vulnerable to
tax evasion Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to red ...
, since land cannot be concealed or moved overseas and titles are easily identified, as they are registered with the public. Land value assessments are usually considered public information, which is available upon request. Transparency reduces tax evasion.


Ethics

Land acquires a
scarcity In economics, scarcity "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good. ...
value owing to the competing needs for space. The value of land generally owes nothing to the landowner and everything to the surroundings. LVT considers the effect on land value of location, and of improvements made to neighbouring land, such as proximity to roads and public works. LVT is the purest implementation of the public finance principle known as
value capture Value capture is a type of public financing that recovers some or all of the value that public infrastructure generates for private landowners. In many countries, the public sector is responsible for the infrastructure required to support urban dev ...
. A
public works Public works are a broad category of infrastructure projects, financed and procured by a government body for recreational, employment, and health and safety uses in the greater community. They include public buildings ( municipal buildings, ...
project can increase land values and thus increase LVT revenues. Arguably, public improvements should be paid for by the landowners who benefit from them. Thus, LVT captures the land value of socially created wealth, allowing a reduction in tax on privately created (non-land) wealth. LVT generally is a progressive tax, with those of greater means paying more, in that land ownership correlates to income and landlords cannot shift the tax burden onto tenants. LVT generally reduces economic inequality, removes incentives to misuse real estate, and reduces the vulnerability of economies to property booms and crashes.


History


Pre-modern

The philosophies and concepts underpinning land value taxation were discussed in ancient times, stemming from taxes on
crop yield In agriculture, the yield is a measurement of the amount of a crop grown, or product such as wool, meat or milk produced, per unit area of land. The seed ratio is another way of calculating yields. Innovations, such as the use of fertilizer, the ...
. For example,
Rishi In Indian religions, a ''rishi'' ( ) is an accomplished and enlightened person. They find mention in various Vedic texts. Rishis are believed to have composed hymns of the Vedas. The Post-Vedic tradition of Hinduism regards the rishis as "gre ...
s of ancient India claimed that land should be held in common, and that unfarmed land should produce the same tax as productive land. "The earth ...is common to all beings enjoying the fruit of their own labour; it belongs...to all alike"; therefore, "there should be left some for everyone".
Apastamba ''Āpastamba Dharmasūtra'' (Sanskrit: आपस्तम्ब धर्मसूत्र) is a Sanskrit text and one of the oldest Dharma-post vedic smriti related texts of Hinduism that have survived into the modern age from the 1st millenniu ...
said "If any person holding land does not exert himself and hence bears no produce, he shall, if rich, be made to pay what ought to have been produced".
Mencius Mencius (孟子, ''Mèngzǐ'', ; ) was a Chinese Confucian philosopher, often described as the Second Sage () to reflect his traditional esteem relative to Confucius himself. He was part of Confucius's fourth generation of disciples, inheriting ...
was a Chinese philosopher (around 300 BCE) who advocated for the elimination of taxes and tariffs, to be replaced by the public collection of urban land rent: "In the market-places, charge land-rent, but don't tax the goods." During the Middle Ages, in the West, the first regular and permanent land tax system was based on a unit of land known as the hide. The hide was originally the amount of land sufficient to support a household. It later became subject to a land tax known as "geld".


Physiocrats

The physiocrats were a group of
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
s who believed that the wealth of nations was derived solely from the value of land
agriculture Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created ...
or
land development Land development is the alteration of landscape in any number of ways, such as: * Changing landforms from a natural or semi-natural state for a purpose such as agriculture or House, housing * subdivision (land), Subdividing real estate into Lot ( ...
. Before the
Industrial Revolution The Industrial Revolution, sometimes divided into the First Industrial Revolution and Second Industrial Revolution, was a transitional period of the global economy toward more widespread, efficient and stable manufacturing processes, succee ...
, this was approximately correct. Physiocracy is one of the "early modern" schools of economics. Physiocrats called for the abolition of all existing taxes, completely
free trade Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
and a
single tax A single tax is a system of taxation based mainly or exclusively on one tax, typically chosen for its special properties, often being a tax on land value. Pierre Le Pesant, sieur de Boisguilbert and Sébastien Le Prestre de Vauban were ear ...
on land. They did not distinguish between the intrinsic value of land and ground rent. Their theories originated in
France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...
and were most popular during the second half of the 18th century. The movement was particularly dominated by Anne Robert Jacques Turgot (1727–1781) and François Quesnay (1694–1774). It influenced contemporary statesmen, such as
Charles Alexandre de Calonne Charles Alexandre de Calonne (20 January 173430 October 1802), titled Count of Hannonville in 1759, was a French statesman, best known for being Louis XVI's Controller-General of Finances (minister of finance) in the years leading up to the Frenc ...
. The physiocrats were highly influential in the early history of land value taxation in the United States.


Radical Movement

A participant in the Radical Movement,
Thomas Paine Thomas Paine (born Thomas Pain; – In the contemporary record as noted by Conway, Paine's birth date is given as January 29, 1736–37. Common practice was to use a dash or a slash to separate the old-style year from the new-style year. In ...
contended in his '' Agrarian Justice'' pamphlet that all citizens should be paid 15 pounds at age 21 "as a compensation in part for the loss of his or her natural inheritance by the introduction of the system of landed property." "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds." This proposal was the origin of the
citizen's dividend Citizen's dividend is a proposed policy based upon the Georgist principle that the natural world is the Commons, common property of all people. It is proposed that all citizens receive regular payments (dividends) from revenue raised by leasin ...
advocated by Geolibertarianism. Thomas Spence advocated a similar proposal except that the land rent would be distributed equally each year regardless of age.


Classical economists

Adam Smith, in his 1776 book ''
The Wealth of Nations ''An Inquiry into the Nature and Causes of the Wealth of Nations'', usually referred to by its shortened title ''The Wealth of Nations'', is a book by the Scottish people, Scottish economist and moral philosophy, moral philosopher Adam Smith; ...
'', first rigorously analyzed the effects of a land value tax, pointing out how it would not hurt economic activity, and how it would not raise contract rents.


Henry George

Henry George Henry George (September 2, 1839 – October 29, 1897) was an American political economist, Social philosophy, social philosopher and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of ...
(2 September 1839 – 29 October 1897) was perhaps the most famous advocate of recovering land rents for public purposes. A journalist, politician, and
political economist Politics () is the set of activities that are associated with making decisions in groups, or other forms of power relations among individuals, such as the distribution of status or resources. The branch of social science that studies poli ...
, he advocated a "
single tax A single tax is a system of taxation based mainly or exclusively on one tax, typically chosen for its special properties, often being a tax on land value. Pierre Le Pesant, sieur de Boisguilbert and Sébastien Le Prestre de Vauban were ear ...
" on land that would eliminate the need for all other taxes. George first articulated the proposal in ''Our Land and Land Policy'' (1871). Later, in his best-selling work ''
Progress and Poverty ''Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy'' is an 1879 book by social theorist and economist Henry George. It is a treatise on the questions of why pov ...
'' (1879), George argued that because the value of land depends on natural qualities combined with the economic activity of communities, including public investments, the
economic rent In economics, economic rent is any payment to the owner of a factor of production in excess of the costs needed to bring that factor into production. In classical economics, economic rent is any payment made (including imputed value) or bene ...
of land was the best source of tax revenue. This book significantly influenced land taxation in the United States and other countries, including Denmark, which continues ''grundskyld'' ('ground duty') as a key component of its tax system. The philosophy that natural resource rents should be captured by society is now often known as
Georgism Georgism, in modern times also called Geoism, and known historically as the single tax movement, is an economic ideology holding that people should own the value that they produce themselves, while the economic rent derived from land—includ ...
. Its relevance to public finance is underpinned by the
Henry George theorem The Henry George theorem states that under certain conditions, aggregate spending by government on public goods will increase aggregate rent based on land value (land rent) more than that amount, with the benefit of the last marginal investment e ...
. Henry George (1839–1897) was an American economist who developed the concept of the Single Tax on land value. In his 1879 book ''Progress and Poverty'', George argued that private land ownership allowed individuals to gain unearned income through rising land values, contributing to inequality and poverty. He believed that as populations increased and cities expanded, landowners profited not from their own labor but from the economic activity of society. George’s proposed land value tax was designed to capture this unearned income and redistribute it for public benefit. His ideas influenced urban policy debates in the United States and abroad and continue to be discussed in relation to housing affordability and wealth inequality. Modern economists, including Thomas Piketty, have noted that land and real estate remain significant sources of wealth concentration. George's work is recognized for linking economic justice to land ownership and for promoting policy reforms aimed at reducing inequality.


Meiji Restoration

After the 1868
Meiji Restoration The , referred to at the time as the , and also known as the Meiji Renovation, Revolution, Regeneration, Reform, or Renewal, was a political event that restored Imperial House of Japan, imperial rule to Japan in 1868 under Emperor Meiji. Althoug ...
in Japan, land tax reform was undertaken. An LVT was implemented beginning in 1873. By 1880 initial problems with valuation and rural opposition had been overcome and rapid industrialisation began.


Liberal and Labour Parties in the United Kingdom

In the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
, LVT was an important part of the platform of the
Liberal Party The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left. For example, while the political systems ...
during the early part of the twentieth century.
David Lloyd George David Lloyd George, 1st Earl Lloyd-George of Dwyfor (17 January 1863 – 26 March 1945) was Prime Minister of the United Kingdom from 1916 to 1922. A Liberal Party (United Kingdom), Liberal Party politician from Wales, he was known for leadi ...
and
H. H. Asquith Herbert Henry Asquith, 1st Earl of Oxford and Asquith (12 September 1852 – 15 February 1928) was a British statesman and Liberal Party (UK), Liberal politician who was Prime Minister of the United Kingdom from 1908 to 1916. He was the last ...
proposed "to free the land that from this very hour is shackled with the chains of feudalism." It was also advocated by
Winston Churchill Sir Winston Leonard Spencer Churchill (30 November 1874 – 24 January 1965) was a British statesman, military officer, and writer who was Prime Minister of the United Kingdom from 1940 to 1945 (Winston Churchill in the Second World War, ...
early in his career. The modern Liberal Party (not to be confused with the Liberal Democrats, who are the heir to the earlier Liberal Party and who offer some support for the idea) remains committed to a local form of LVT, as do the
Green Party of England and Wales The Green Party of England and Wales (GPEW; ), often known simply as the Green Party or the Greens, is a Green politics, green, Left-wing politics, left-wing political party in England and Wales. Since October 2021, Carla Denyer and Adrian Ram ...
and the
Scottish Greens The Scottish Greens (also known as the Scottish Green Party; ) are a green political party in Scotland. The party has 7 MSPs of 129 in the Scottish Parliament, the party holds 35 of the 1226 councillors at Scottish local Government level. The ...
. The 1931 Labour budget included an LVT, but before it came into force it was repealed by the Conservative-dominated national government that followed. An attempt at introducing LVT in the administrative
County of London The County of London was a county of England from 1889 to 1965, corresponding to the area known today as Inner London. It was created as part of the general introduction of elected county government in England, by way of the Local Government A ...
was made by the local authority under the leadership of
Herbert Morrison Herbert Stanley Morrison, Baron Morrison of Lambeth, (3 January 1888 – 6 March 1965) was a British politician who held a variety of senior positions in the Cabinet as a member of the Labour Party. During the inter-war period, he was Minist ...
in the 1938–1939 Parliament, called the London Rating (Site Values) Bill. Although it failed, it detailed legislation for the implementation of a system of LVT using annual value assessment. After 1945, the Labour Party adopted the policy, against substantial opposition, of collecting "development value": the increase in land price arising from planning consent. This was one of the provisions of the
Town and Country Planning Act 1947 The Town and Country Planning Act 1947 (10 & 11 Geo. 6. c. 51) was an Act of Parliament (United Kingdom), Act of Parliament in the United Kingdom passed by the Labour government led by Clement Attlee. It came into effect on 1 July 1948, and al ...
, but it was repealed when the Labour government lost power in 1951. Senior Labour figures in recent times have advocated an LVT, notably
Andy Burnham Andrew Murray Burnham (born 7 January 1970) is a British politician who has served as Mayor of Greater Manchester since 2017 Greater Manchester mayoral election, 2017. He served in Gordon Brown's Brown ministry, Cabinet as Chief Secretary to th ...
in his 2010 leadership campaign, former Leader of the Opposition
Jeremy Corbyn Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who has been Member of Parliament (United Kingdom), Member of Parliament (MP) for Islington North (UK Parliament constituency), Islington North since 1983. Now an Independent ...
, and Shadow Chancellor
John McDonnell John Martin McDonnell (born 8 September 1951) is a British politician who served as Shadow Chancellor of the Exchequer from 2015 to 2020. He has been the Member of Parliament (United Kingdom), Member of Parliament (MP) for Hayes and Harlington ...
.


Republic of China

The
Republic of China Taiwan, officially the Republic of China (ROC), is a country in East Asia. The main geography of Taiwan, island of Taiwan, also known as ''Formosa'', lies between the East China Sea, East and South China Seas in the northwestern Pacific Ocea ...
was one of the first jurisdictions to implement an LVT, specified in its constitution.
Sun Yat-Sen Sun Yat-senUsually known as Sun Zhongshan () in Chinese; also known by Names of Sun Yat-sen, several other names. (; 12 November 186612 March 1925) was a Chinese physician, revolutionary, statesman, and political philosopher who founded the Republ ...
would learn about LVT from the
Kiautschou Bay concession The Kiautschou Bay Leased Territory was a German colonial empire, German leased territory in Qing dynasty, Imperial and Republic of China (1912–1949), Early Republican China from 1898 to 1914. Covering an area of , it centered on Kiautschou ...
, which had successful implementation of LVT, bringing increased wealth and financial stability to the colony. The
Republic of China Taiwan, officially the Republic of China (ROC), is a country in East Asia. The main geography of Taiwan, island of Taiwan, also known as ''Formosa'', lies between the East China Sea, East and South China Seas in the northwestern Pacific Ocea ...
would go on to implement LVT in farms at first, later implementing it in the urban areas due to its success.


Economists' perspectives


Early neoclassicists

Alfred Marshall Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist and one of the most influential economists of his time. His book ''Principles of Economics (Marshall), Principles of Economics'' (1890) was the dominant economic textboo ...
argued in favour of a "fresh air rate", a tax to be charged to urban landowners and ''levied on that value of urban land that is caused by the concentration of population''. That ''general rate'' should have ''to be spent on breaking out small green spots in the midst of dense industrial districts, and on the preservation of large green areas between different towns and between different suburbs which are tending to coalesce''. This idea influenced Marshall's pupil
Arthur Pigou Arthur Cecil Pigou (; 18 November 1877 – 7 March 1959) was an English economist. As a teacher and builder of the School of Economics at the University of Cambridge, he trained and influenced many Cambridge economists who went on to take chair ...
's ideas on taxing negative externalities. Pigou wrote an essay in favor of the land value tax, calling it "an exceptionally good object for taxation." His views were interpreted as support for
Lloyd George David Lloyd George, 1st Earl Lloyd-George of Dwyfor (17 January 1863 – 26 March 1945) was Prime Minister of the United Kingdom from 1916 to 1922. A Liberal Party (United Kingdom), Liberal Party politician from Wales, he was known for leadi ...
's
People's Budget The 1909/1910 People's Budget was a proposal of the Liberal government that introduced unprecedented taxes on the lands and incomes of Britain's wealthy to fund new social welfare programmes, such as non-contributary old age pensions under Ol ...
.


Nobel laureates

Paul Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "h ...
supported LVT. "Our ideal society finds it essential to put a rent on land as a way of maximizing the total consumption available to the society. ...Pure land rent is in the nature of a 'surplus' which can be taxed heavily without distorting production incentives or efficiency. A land value tax can be called 'the useful tax on measured land surplus'."
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
stated: "There's a sense in which all taxes are antagonistic to free enterprise – and yet we need taxes. ...So the question is, which are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."
Paul Krugman Paul Robin Krugman ( ; born February 28, 1953) is an American New Keynesian economics, New Keynesian economist who is the Distinguished Professor of Economics at the CUNY Graduate Center, Graduate Center of the City University of New York. He ...
agreed that LVT is efficient, however he disputed whether it should be considered a single tax, as he believed it would not be enough alone, excluding taxes on natural resource rents and other Georgist taxes, to fund a welfare state. "Believe it or not, urban economics models actually do suggest that Georgist taxation would be the right approach at least to finance city growth. But I would just say: I don't think you can raise nearly enough money to run a modern welfare state by taxing land nly"
Joseph Stiglitz Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, political activist, and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2 ...
, articulating the Henry George theorem wrote that, "Not only was Henry George correct that a tax on land is nondistortionary, but in an equalitarian society ... tax on land raises just enough revenue to finance the (optimally chosen) level of government expenditure."


Other economists

Michael Hudson is a proponent for taxing rent, especially land rent. ".... politically, taxing economic rent has become the bête noire of neoliberal globalism. It is what property owners and rentiers fear most of all, as land,
subsoil Subsoil is the layer of soil under the topsoil on the surface of the ground. Like topsoil, it is composed of a variable mixture of small particles such as sand, silt and clay, but with a much lower percentage of organic matter and humus. The su ...
resources and
natural monopolies A natural monopoly is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming adv ...
far exceed industrial capital in magnitude. What appears in the statistics at first glance as 'profit' turns out upon examination to be Ricardian or 'economic' rent."
Rick Falkvinge Rick Falkvinge (born Dick Greger Augustsson, 21 January 1972) is a Swedish politician who founded the Pirate Party, serving as its leader until 2011. Early life and career Falkvinge grew up in Ruddalen, Gothenburg, and studied Natural Scie ...
proposed a "simplified taxless state" where the state owns all the land it can defend from other states and leases this land to people at market rates. Fred Foldvary, an Austrian economist, has expressed support for the LVT and has integrated Georgist and Austrian models into his theory of the business cycle. "Conventional macroeconomics lacks a warranted explanation of the major business cycle, while the Austrian and geo-economic Georgist schools have incomplete theories. A geo-Austrian synthesis, in contrast, provides a potent theory consistent with historical cycles and with explanations about the root causes."


Implementation


Australia

Land taxes in Australia are levied by the states. The exemption thresholds vary, as do tax rates and other rules. In
New South Wales New South Wales (commonly abbreviated as NSW) is a States and territories of Australia, state on the Eastern states of Australia, east coast of :Australia. It borders Queensland to the north, Victoria (state), Victoria to the south, and South ...
, the state land tax exempts farmland and principal residences and there is a tax threshold. Determination of land value for tax purposes is the responsibility of the Valuer-General. In
Victoria Victoria most commonly refers to: * Queen Victoria (1819–1901), Queen of the United Kingdom and Empress of India * Victoria (state), a state of Australia * Victoria, British Columbia, Canada, a provincial capital * Victoria, Seychelles, the capi ...
, the land tax threshold is on the total value of all Victorian property owned by a person on 31 December of each year and taxed at a progressive rate. The principal residence, primary production land and land used by a charity are exempt from land tax. In
Tasmania Tasmania (; palawa kani: ''Lutruwita'') is an island States and territories of Australia, state of Australia. It is located to the south of the Mainland Australia, Australian mainland, and is separated from it by the Bass Strait. The sta ...
the threshold is and the audit date is 1 July. Between and the tax rate is 0.55% and over it is 1.5%. In
Queensland Queensland ( , commonly abbreviated as Qld) is a States and territories of Australia, state in northeastern Australia, and is the second-largest and third-most populous state in Australia. It is bordered by the Northern Territory, South Austr ...
, the threshold for individuals is and for other entities, and the audit date is 30 June. In South Australia the threshold is and taxed at a progressive rate, the audit date is 30 June. By revenue, property taxes represent 4.5% of total taxation in Australia. A government report in 1986 for
Brisbane, Queensland Brisbane ( ; ) is the List of Australian capital cities, capital and largest city of the States and territories of Australia, state of Queensland and the list of cities in Australia by population, third-most populous city in Australia, with a ...
advocated an LVT. The
Henry Tax Review The Australia's Future Tax System Review, informally known as the Henry Tax Review was commissioned by the Rudd Government in 2008 and published in 2010. The review was intended to guide tax system reforms over the next 10 to 20 years. Remit The ...
of 2010 commissioned by the federal government recommended that state governments replace
stamp duty Stamp duty is a tax that is levied on single property purchases or documents (including, historically, the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions). Historically, a ...
with LVT. The review proposed multiple marginal rates and that most agricultural land would be in the lowest band with a rate of zero. The
Australian Capital Territory The Australian Capital Territory (ACT), known as the Federal Capital Territory until 1938, is an internal States and territories of Australia, territory of Australia. Canberra, the capital city of Australia, is situated within the territory, an ...
moved to adopt this system and planned to reduce stamp duty by 5% and raise land tax by 5% for each of twenty years.


Belgium

Bernard Clerfayt Bernard Clerfayt (; born 30 December 1961, in Uccle) is a Belgian politician. He has been the mayor of Schaerbeek since 2001 and is currently vice-president of the Front Démocratique des Francophones (FDF). As is common in Belgium, he holds a ...
called for the overhaul of the property tax in the Brussels region, with a higher tax for land values than for buildings.


Canada

LVTs were common in Western Canada at the turn of the twentieth century. In Vancouver LVT became the sole form of municipal taxation in 1910 under the leadership of mayor, Louis D. Taylor. Gary B. Nixon (2000) stated that the rate never exceeded 2% of land value, too low to prevent the speculation that led directly to the 1913 real estate crash. All Canadian provinces later taxed improvements. The 2022 value of land in Canada, as reported by the National Balance Sheet, is $5.824 trillion. LVTs can be somewhat controversial in Canada because of the already high cost of property that many Canadians struggle to afford.


Estonia

Estonia Estonia, officially the Republic of Estonia, is a country in Northern Europe. It is bordered to the north by the Gulf of Finland across from Finland, to the west by the Baltic Sea across from Sweden, to the south by Latvia, and to the east by Ru ...
levies an LVT to fund municipalities. It is a state-level tax, but 100% of the revenue funds local councils. The rate is set by the local council within the limits of 0.1–2.5%. It is one of the most important sources of funding for municipalities. LVT is levied on the value of the land only. Few exemptions are available and even public institutions are subject to it. Church sites are exempt, but other land held by religious institutions is not. The tax has contributed to a high rate (~90%) of owner-occupied residences within Estonia, compared to a rate of 67.4% in the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
.


Germany

In 2020 the state parliament of
Baden-Württemberg Baden-Württemberg ( ; ), commonly shortened to BW or BaWü, is a states of Germany, German state () in Southwest Germany, east of the Rhine, which forms the southern part of Germany's western border with France. With more than 11.07 million i ...
agreed on a modified version of the LVT. Starting in 2025, 1.3‰ of the land value is taxed annually. The modification concerns tax reductions for different land uses such as (social) housing, forestry and cultural sites.
Baden-Württemberg Baden-Württemberg ( ; ), commonly shortened to BW or BaWü, is a states of Germany, German state () in Southwest Germany, east of the Rhine, which forms the southern part of Germany's western border with France. With more than 11.07 million i ...
is the only state in
Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...
to replace its previous property tax by a LVT. The decision has been met with criticism. It's argued that the change unequally benefits wealthy real estate owners who previously had to pay
property tax A property tax (whose rate is expressed as a percentage or per mille, also called ''millage'') is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or Wealth t ...
.


Hong Kong

Government rent in Hong Kong, formerly the crown rent, is levied in addition to
rates Rate or rates may refer to: Finance * Rate (company), an American residential mortgage company formerly known as Guaranteed Rate * Rates (tax), a type of taxation system in the United Kingdom used to fund local government * Exchange rate, rate ...
. Properties located in the
New Territories The New Territories (N.T., Traditional Chinese characters, Chinese: ) is one of the three areas of Hong Kong, alongside Hong Kong Island and Kowloon. It makes up 86.2% of Hong Kong's territory, and contains around half of the population of H ...
(including
New Kowloon New Kowloon is an area in Hong Kong, bounded to the south by Boundary Street, and to the north by the ranges of the Eagle's Nest, Beacon Hill, Lion Rock, Tate's Cairn and Kowloon Peak. It covers the present-day Kwun Tong District and Wong ...
) or located in the rest of the territory and whose land grant was recorded after 27 May 1985, pay 3% of the rateable rental value. Hong Kong is unique in a way because the government owns virtually all the land and allows for long term leases which is how they make their income off property. Hong Kong levies a property tax known as "rates," which is a tax on the occupation of property or payable by the owner of unoccupied property. This is calculated as a percentage of the property's estimated rental value, assessed quarterly.


Hungary

Municipal governments in Hungary levy an LVT based on the area or the land's adjusted market value. The maximum rate is 3% of the adjusted market value.


Kenya

Kenya's LVT history dates to at least 1972, shortly after it achieved independence. Local governments must tax land value but are required to seek approval from the central government for rates that exceed 4 percent. Buildings were not taxed in Kenya as of 2000. The central government is legally required to pay municipalities for the value of land it occupies. Kelly claimed that possibly as a result of this land reform, Kenya became the only stable country in its region. As of late 2014, the city of Nairobi still taxed only land values, although a tax on improvements had been proposed.


Mexico

The capital city of Baja California,
Mexicali Mexicali (; ) is the capital city of the States of Mexico, Mexican state of Baja California. The city, which is the seat of the Mexicali Municipality, has a population of 689,775, according to the 2010 census, while the Calexico–Mexicali, Cale ...
, has had an LVT since the 1990s, when it became the first locality in Mexico to implement such a tax.


Namibia

A land value taxation on rural land was introduced in Namibia, with the primary intention of improving land use.


Russia

In 1990, several economists wrote to then
President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university *President (government title) President may also refer to: Arts and entertainment Film and television *'' Præsident ...
Mikhail Gorbachev Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet and Russian politician who served as the last leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
suggesting that
Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...
adopt LVT. Currently, Russia has an LVT of 0.3% on residential, agricultural and utilities lands as well as a 1.5% tax for other types of land.


Singapore

Singapore owns the majority of its land, which it leases for 99-year terms. In addition, Singapore taxes development uplift at around 70%. These two sources of revenue fund most of Singapore's new infrastructure.


South Korea

South Korea has an aggregate land tax that is levied annually based on an individual's landholding value across the whole country. Speculative and residential land has a progressive tax rate of 0.2–5%, commercial and building sites 0.3–2%, farm and forest lands 0.1% and luxury properties 5%.


Spain


Taiwan

As of 2010, land value taxes and land value increment taxes accounted for 8.4% of total government revenue in Taiwan.


Thailand

The Thai government introduced the Land and Building Tax Act B.E. 2562 in March 2019, which came into effect on 1 January 2020. It sets a maximum tax rate of 1.2% on commercial and vacant land, 0.3% on residential land and 0.15% on agricultural land.


United States

In the late 19th century George's followers founded a single tax colony at
Fairhope, Alabama Fairhope is a city in Baldwin County, Alabama, United States, located on the eastern shoreline of Mobile Bay. The population was 22,477 at the 2020 census. Fairhope is a principal city of the Daphne-Fairhope-Foley metropolitan area, which in ...
. Although the colony, now a nonprofit corporation, still holds land in the area and collects a relatively small ground rent, the land is subject to state and local property taxes. Common property taxes include land value, which usually has a separate assessment. Thus, land value taxation already exists in many jurisdictions. Some jurisdictions have attempted to rely more heavily on it. In
Pennsylvania Pennsylvania, officially the Commonwealth of Pennsylvania, is a U.S. state, state spanning the Mid-Atlantic (United States), Mid-Atlantic, Northeastern United States, Northeastern, Appalachian, and Great Lakes region, Great Lakes regions o ...
, certain cities raised the tax on land value while reducing the tax on improvement/building/structure values. For example, the city of Altoona adopted a property tax that solely taxed land value in 2002, but repealed the tax in 2016. Many Pennsylvania cities use a split-rate tax, which taxes the value of land at a higher rate than the value of buildings.


Zimbabwe

In
Zimbabwe file:Zimbabwe, relief map.jpg, upright=1.22, Zimbabwe, relief map Zimbabwe, officially the Republic of Zimbabwe, is a landlocked country in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Bots ...
, government coalition partners the
Movement for Democratic Change Movement may refer to: Generic uses * Movement (clockwork), the internal mechanism of a timepiece * Movement (sign language), a hand movement when signing * Motion, commonly referred to as movement * Movement (music), a division of a larger co ...
adopted LVT.


Countries with active discussion


China

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
's Real Rights Law contains provisions founded on LVT analysis.


Ireland

In 2010 the government of
Ireland Ireland (, ; ; Ulster Scots dialect, Ulster-Scots: ) is an island in the North Atlantic Ocean, in Northwestern Europe. Geopolitically, the island is divided between the Republic of Ireland (officially Names of the Irish state, named Irelan ...
announced that it would introduce an
LVT LVT may refer to: * Land value tax, a levy on the value of land * Landing Vehicle Tracked The Amphibious Vehicle, Tracked (LVT or AMTRAC) is an amphibious warfare vehicle and Amphibious vehicle, amphibious landing craft, introduced by the ...
, beginning in 2013. Following a 2011 change in government, a property tax was introduced instead.


New Zealand

After decades of a modest LVT, New Zealand abolished it in 1990. Discussions continue as to whether or not to bring it back. Earlier Georgist politicians included Patrick O'Regan and Tom Paul (who was Vice-President of the New Zealand Land Values League).


United Kingdom

In September 1908, Chancellor of the Exchequer
David Lloyd George David Lloyd George, 1st Earl Lloyd-George of Dwyfor (17 January 1863 – 26 March 1945) was Prime Minister of the United Kingdom from 1916 to 1922. A Liberal Party (United Kingdom), Liberal Party politician from Wales, he was known for leadi ...
instructed McKenna, the
First Lord of the Admiralty First Lord of the Admiralty, or formally the Office of the First Lord of the Admiralty, was the title of the political head of the English and later British Royal Navy. He was the government's senior adviser on all naval affairs, responsible f ...
, to build more
Dreadnought The dreadnought was the predominant type of battleship in the early 20th century. The first of the kind, the Royal Navy's , had such an effect when launched in 1906 that similar battleships built after her were referred to as "dreadnoughts", ...
s. The ships were to be financed by an LVT. Lloyd George believed that relating national defence to land tax would both provoke the opposition of the
House of Lords The House of Lords is the upper house of the Parliament of the United Kingdom. Like the lower house, the House of Commons of the United Kingdom, House of Commons, it meets in the Palace of Westminster in London, England. One of the oldest ext ...
and rally the people round a simple emotive issue. The Lords, composed of wealthy landowners, rejected the Budget in November 1909, leading to a constitutional crisis. LVT was on the UK statute books briefly in 1931, introduced by
Philip Snowden Philip Snowden, 1st Viscount Snowden, PC (; 18 July 1864 – 15 May 1937) was a British politician. A strong speaker, he became popular in trade union circles for his denunciation of capitalism as unethical and his promise of a socialist utop ...
's 1931 budget, strongly supported by prominent LVT campaigner Andrew MacLaren MP. MacLaren lost his seat at the next election (1931) and the act was repealed. MacLaren tried again with a
private member's bill A private member's bill is a bill (proposed law) introduced into a legislature by a legislator who is not acting on behalf of the executive branch. The designation "private member's bill" is used in most Westminster system jurisdictions, in wh ...
in 1937; it was rejected 141 to 118.
Labour Land Campaign
advocates within the Labour Party and the broader labour movement for "a more equitable distribution of the Land Values that are created by the whole community" through LVT. Its membership includes members of the British Labour Party, trade unions and cooperatives and individuals. The Liberal Democrats' ALTER (Action for Land Taxation and Economic Reform) aims: The Green Party "favour moving to a system of Land Value Tax, where the level of taxation depends on the rental value of the land concerned." A course in "Economics with Justice" with a strong foundation in LVT is offered at the
School of Economic Science The School of Philosophy and Economic Science (SPES), also operating under the names the School of Philosophy and the School of Practical Philosophy and legally named the School of Economic Science (SES), is a worldwide organisation based in L ...
, which was founded by
Andrew MacLaren Andrew MacLaren (28 May 1883 – 11 April 1975) was a British politician who represented Burslem as a Member of Parliament for three separate terms during the 20th century. A member of the Labour Party and Independent Labour Party, his passion ...
MP and has historical links with the
Henry George Foundation The Henry George Foundation is an independent UK economic and social justice think tank and public education group concerned with "the development of sound relationships between the citizen, our communities (from the local to the global) and ou ...
.


=Scotland

= In February 1998, the
Scottish Office The Scottish Office was a department of the Government of the United Kingdom from 1885 until 1999, exercising a wide range of government functions in relation to Scotland under the control of the Secretary of State for Scotland. Following the es ...
of the British Government launched a public consultation process on land reform. A survey of the public response found that: "excluding the responses of the lairds and their agents, reckoned as likely prejudiced against the measure, 20% of all responses favoured the land tax" (12% in grand total, without the exclusions). The government responded by announcing "a comprehensive economic evaluation of the possible impact of moving to a land value taxation basis". However, no measure was adopted. In 2000 the Parliament's Local Government Committee's inquiry into local government finance explicitly included LVT, but the final report omitted any mention. In 2003 the Scottish Parliament passed a resolution: "That the Parliament notes recent studies by the
Scottish Executive The Scottish Government (, ) is the executive arm of the devolved government of Scotland. It was formed in 1999 as the Scottish Executive following the 1997 referendum on Scottish devolution, and is headquartered at St Andrew's House in t ...
and is interested in building on them by considering and investigating the contribution that land value taxation could make to the cultural, economic, environmental and democratic renaissance of Scotland." In 2004 a letter of support was sent from members of the Scottish Parliament to the organisers and delegates of the IU's 24th international conference—including members of the
Scottish Greens The Scottish Greens (also known as the Scottish Green Party; ) are a green political party in Scotland. The party has 7 MSPs of 129 in the Scottish Parliament, the party holds 35 of the 1226 councillors at Scottish local Government level. The ...
, the
Scottish Socialist Party The Scottish Socialist Party (SSP) is a Left-wing politics, left-wing political party campaigning for the establishment of an Scottish independence, independent Socialism, socialist Scottish Scottish republicanism, republic. The party was fou ...
and the
Scottish National Party The Scottish National Party (SNP; ) is a Scottish nationalist and social democratic party. The party holds 61 of the 129 seats in the Scottish Parliament, and holds 9 out of the 57 Scottish seats in the House of Commons of the United Kingdom, ...
. The policy was considered in the 2006 Scottish Local Government Finance Review, whose 2007 Report concluded that "although land value taxation meets a number of our criteria, we question whether the public would accept the upheaval involved in radical reform of this nature, unless they could clearly understand the nature of the change and the benefits involved.... We considered at length the many positive features of a land value tax which are consistent with our recommended local property tax PT particularly its progressive nature." However, " ving considered both rateable value and land value as the basis for taxation, we concur with Layfield (UK Committee of Inquiry, 1976) who recommended that any local property tax should be based on capital values." In 2009,
Glasgow City Council Glasgow City Council (Scottish Gaelic: ''Comhairle Baile Ghlaschu'') is the Local government in Scotland, local government authority for Glasgow, Glasgow City council area, Scotland. In its modern form it was created in 1996. Glasgow was former ...
resolved to introduce LVT by saying "the idea could become the blueprint for Scotland's future local taxation". The Council agreed to a "long term move to a local property tax / land value tax hybrid tax". Its Local Taxation Working Group stated that simple on-hybridland value taxation should itself "not be discounted as an option for local taxation reform: it potentially holds many benefits and addresses many existing concerns".


Tax rates


EU countries


See also

*
Citizen's dividend Citizen's dividend is a proposed policy based upon the Georgist principle that the natural world is the Commons, common property of all people. It is proposed that all citizens receive regular payments (dividends) from revenue raised by leasin ...
*
Classical economics Classical economics, also known as the classical school of economics, or classical political economy, is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. It includ ...
*
Danegeld Danegeld (; "Danish tax", literally "Dane yield" or tribute) was a tax raised to pay tribute or Protection racket, protection money to the Viking raiders to save a land from being ravaged. It was called the ''geld'' or ''gafol'' in eleventh-c ...
*
Ecotax An environmental tax, ecotax (short for ecological taxation), or green tax is a tax levied on activities which are considered to be harmful to the environment and is intended to promote environmentally friendly alternatives via economic incentive ...
* Equity in taxation *
Excess profits tax An excess profits tax, EPT, is a tax on returns or profits which exceed risk-adjusted ''normal'' returns. The concept of ''excess profit'' is very similar to that of economic rent. Excess profit taxes are usually imposed on monopolist industries ...
*
Geographic information system A geographic information system (GIS) consists of integrated computer hardware and Geographic information system software, software that store, manage, Spatial analysis, analyze, edit, output, and Cartographic design, visualize Geographic data ...
* Geolibertarianism *
Georgism Georgism, in modern times also called Geoism, and known historically as the single tax movement, is an economic ideology holding that people should own the value that they produce themselves, while the economic rent derived from land—includ ...
*
Inheritance tax International tax law distinguishes between an estate tax and an inheritance tax. An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and pro ...
* International Union for Land Value Taxation (The IU) *
Land (economics) In economics, land comprises all naturally occurring resources as well as geographic land. Examples include particular geographical locations, mineral deposits, forests, fish stocks, atmospheric quality, geostationary orbits, and portions of ...
* Land monopolization and
reform Reform refers to the improvement or amendment of what is wrong, corrupt, unsatisfactory, etc. The modern usage of the word emerged in the late 18th century and is believed to have originated from Christopher Wyvill's Association movement, which ...
*
Land speculation In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable in a brief amount of time. It can also refer to short sales in which the speculator hopes for a decline ...
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Land tenure In Common law#History, common law systems, land tenure, from the French verb "" means "to hold", is the legal regime in which land "owned" by an individual is possessed by someone else who is said to "hold" the land, based on an agreement betw ...
and registration * Law of rent *
Lockean proviso The Lockean proviso is a feature of John Locke John Locke (; 29 August 1632 (Old Style and New Style dates, O.S.) – 28 October 1704 (Old Style and New Style dates, O.S.)) was an English philosopher and physician, widely regarded as on ...
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Natural resource economics Natural resource economics deals with the supply, demand, and allocation of the Earth's natural resources. One main objective of natural resource economics is to better understand the role of natural resources in the economy in order to devel ...
* Open letter to Gorbachev *
Optimal tax Optimal tax theory or the theory of optimal taxation is the study of designing and implementing a tax that maximises a social welfare function subject to economic constraints. The social welfare function used is typically a function of individuals ...
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Physiocracy Physiocracy (; from the Greek for "government of nature") is an economic theory developed by a group of 18th-century Age of Enlightenment French economists. They believed that the wealth of nations derived solely from the value of "land agricult ...
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Pigovian tax A Pigouvian tax (also spelled Pigovian tax) is a tax on any market activity that generates negative externalities (i.e., external costs incurred by third parties that are not included in the market price). It is a method that tries to internal ...
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Progressive tax A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term ''progressive'' refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the ...
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Property rights (economics) Property rights are constructs in economics for determining how a resource or economic good is used and owned, which have developed over ancient and modern history, from Abrahamic law to Article 17 of the Universal Declaration of Human Rights. R ...
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Property Tax A property tax (whose rate is expressed as a percentage or per mille, also called ''millage'') is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or Wealth t ...
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Prosper Australia Prosper Australia is a non-profit association incorporated in the State of Victoria, Australia dedicated to reforming taxes onto land as articulated by Adam Smith, the Physiocrats, John Stuart Mill, and most notably by Henry George in ''Progres ...
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Rent-seeking Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effi ...
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Scottish League for the Taxation of Land Values The Scottish League for the Taxation of Land Values is an independent national campaigning organisation that advocates radical reform of Scotland's system of taxation. Known as The Scottish League, the organisation advances the programme of the n ...
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Single tax A single tax is a system of taxation based mainly or exclusively on one tax, typically chosen for its special properties, often being a tax on land value. Pierre Le Pesant, sieur de Boisguilbert and Sébastien Le Prestre de Vauban were ear ...
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Tax reform Tax reform is the process of changing the way taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits. Tax reform can include reducing the level of taxati ...
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Tax shift Tax shift or tax swap is a change in taxation that eliminates or reduces one or several taxes and establishes or increases others while keeping the overall revenue the same. Specifically, it is often used to refer to increases in indirect tax and ...
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Value capture Value capture is a type of public financing that recovers some or all of the value that public infrastructure generates for private landowners. In many countries, the public sector is responsible for the infrastructure required to support urban dev ...
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Wealth tax A wealth tax (also called a capital tax or equity tax) is a tax on an entity's holdings of assets or an entity's net worth. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and ...
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Windfall tax A windfall tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular company or industry. There have been windfall taxes in various countries across the world, including Australia, Italy, and Mongolia (2006–20 ...


References


Notes


Sources

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Further reading

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External sources


New South Wales Land Tax Management Act 1956 (Australia)
{{DEFAULTSORT:Land Value Tax Tax terms Windfall taxes