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"without addressing its primary cause (land speculation.)" I don't understand what you mean. We can quibble about the details of this particular tax, but set t
by lkrubner 10y ago
"without addressing its primary cause (land speculation.)"
I don't understand what you mean. We can quibble about the details of this particular tax, but set that aside for a moment.
The best way to fight speculation is to put a tax on it. To see what I mean, imagine these 2 scenarios:
1.) There is a country without any land tax. You see a house that you can buy. You believe prices will be 10% higher within one year. Do you buy the house?
2.) There is a country with a 10% annual land tax. You see a house that you can buy. You believe prices will be 10% higher within one year. Do you buy the house?
In scenario #1 the house is a good investment.
In scenario #2, you would only buy the house if you are going to live in it, or if you can rent it out and make money off of it. In either case, in scenario #2, the house is not vacant.
A land tax forces the owners of land to use the land for productive purposes, rather than just holding it.
- anigbrowl 10y agoQuite. This system is called Georgism, after the economist who first proposed it.
- bendmorris 10y agoMaybe I was unclear, but it sounds like we agree: "A land tax on the unimproved value of the land is an elegant solution which incentivizes adding value to property rather than using it to park money." Vacancies are caused by the fact that we live in scenario #1. Speculators can buy up properties, keep them empty, and reap a financial reward (as long as they time it right) as demand for the location increases.