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AFAIK, we have tax on property. We tax the land plus the value added to the land by building on it. IMH, we shouldn't tax the construction since that is disinc
by huherto 10y ago
AFAIK, we have tax on property. We tax the land plus the value added to the land by building on it. IMH, we shouldn't tax the construction since that is disincentive for economic activity. But the land? Some land just becomes valuable because it is near other valuable properties.
- aaron-santos 10y agoGeorgism gets a lot of support on HN, but how exactly would the unimproved value of land be determined? Similar to the appraisal system we have in place for houses, or something different?
- huherto 10y agoIt is definitely an interesting problem. Perhaps a function based on the travel distance from where the rest of the people are living or working ? Sort of like page rank.
- ghaff 10y agoSo land in Detroit and San Francisco, which have similar populations, should be valued about the same. (Yes, there are probably more people in the Bay area overall, but to a first approximation.) And coastal property on the southern Maine coast should have a low value. Ultimately, it's market value. You can subtract the value of the building but it's actually hard to separate the two.
- huherto 10y agoWell San Francisco is on the coast. By sea, it has shorter travel times to all the cities in the West Coast, Vancouver and a continent called Asia.
- vintermann 10y agoInstead of distance to people, how about distance to people times dollars?
- logfromblammo 10y agoI think you would have to take the current market value of the land, then subtract an estimate of what it would cost to re-do the improvements at today's prices. The insured value of structures may be an easy way to get at that estimate. For instance, a lot with a house on it that costs $250k, when the structure would cost $180k to reconstruct from scratch, implies that an adjacent empty lot of the same size would be $70k. But that's not entirely unimproved. There still may be water, power, telecoms, and sewer utility hookups, which certainly qualify as improvements. So you estimate the cost to re-wire/re-pipe the entire neighborhood from the utility, and divide that across all the lots, weighted by area. And being close to a road is an improvement... Professional appraisers would most likely just make a plausible-sounding number up, and collude with one another to ensure consistency over an entire county. It's the easy way.
- DasIch 10y agoThe idea of land value tax is to create value by building on that land. Decreasing the tax when there is nothing on the land goes against that.
- sgnelson 10y agoJust as an FYI: https://en.wikipedia.org/wiki/Bid_rent_theory https://en.wikipedia.org/wiki/Bid_rent_theory