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Remember that most people do not own their home. Land value tax or no, most landlords are going to price their rent as high as they can get away with. Tenants

Remember that most people do not own their home. Land value tax or no, most landlords are going to price their rent as high as they can get away with. Tenants are effectively paying a land value tax (the rent), whose amount is determined by the market. Generalising land value tax effectively makes everyone a tenant —land property is abolished. This sounds revolutionary, but since this affects only a minority, I'm not sure how much of a change this would really be. I'm pretty sure for instance that it wouldn't rise the renting prices in big cities.

ZenoArrow 11y ago
Land property isn't abolished by taxing it. With regards to the rental market, people will only rent where they can afford, which is exactly the same as now, what it does change is the amount of profit that landlords can make from each property. If we have a land use tax I'd like to see it increase based on the number of properties you own, which would discourage people buying large numbers of properties just to rent them out. Again, the purpose of the tax should be to curb the demand for property as an investment. If you do that the increase in house prices should come down, and as a side benefit there's less incentive for companies to expand nationally, which would increase diversity in the marketplace.
eru 11y ago
Yes, you got the effects exactly right. The land value tax would have no direct effects on rent. That's why it's such an awesome tax: it does not distort economic activity. Unlike eg income tax which discourages working. Pro-forma the land will still be in private hands, thus encouraging people to improve it. (Remember: buildings are not taxed, only the land.) The government will be very interested in improving the value of land, eg by making saner infrastructure investments, because they automatically get more tax money to play with that way.

ZenoArrow 11y ago

Land property isn't abolished by taxing it. With regards to the rental market, people will only rent where they can afford, which is exactly the same as now, what it does change is the amount of profit that landlords can make from each property. If we have a land use tax I'd like to see it increase based on the number of properties you own, which would discourage people buying large numbers of properties just to rent them out. Again, the purpose of the tax should be to curb the demand for property as an investment. If you do that the increase in house prices should come down, and as a side benefit there's less incentive for companies to expand nationally, which would increase diversity in the marketplace.

eru 11y ago

Yes, you got the effects exactly right. The land value tax would have no direct effects on rent. That's why it's such an awesome tax: it does not distort economic activity. Unlike eg income tax which discourages working. Pro-forma the land will still be in private hands, thus encouraging people to improve it. (Remember: buildings are not taxed, only the land.) The government will be very interested in improving the value of land, eg by making saner infrastructure investments, because they automatically get more tax money to play with that way.