alt Hacker NewsCan someone please explain to me a practical way to apply the LVT? Vancouver used to have an LVT, it was too low and there was a housing speculation bubble in the early 1900s, since property was appreciating much faster than the tax rate. And if the LVT is too high, then you will have very little new development. This isn't even mentioning how you determine the value of the land.
Denmark has an LVT and copenhagen affordability is... not good.
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LVT is a tax on the value of the land specifically, not a traditional property tax. This encourages development on valuable land that is currently being put to unproductive uses.
For example, if you own a lot in a downtown metro which is a parking lot you pay low property taxes because parking lots have low property values. You are disincentivised to develop it because your property tax would go up. Opposite incentives with a LVT.
As far as I can tell, LVT only achieves what it sets out to do if it’s equivalent to market rent.
As in, you never really “own” your land, you’re just renting it from the sovereign. If you can’t make good enough use out of it to afford that rent, you should move on. You can find comments on this thread that make this argument explicitly in terms of “maximizing land use efficiency”.
This was the economic structure of feudalism. It … wasn’t great. Private ownership of land has its own tradeoffs but a few centuries of historical experimentation in both directions has been fairly decisive.