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And so there is a way to get a reasonable approximation of land value: Subtract the insured value of the improvements (which should be accurate by virtue of bei
by tesseract 4y ago
And so there is a way to get a reasonable approximation of land value: Subtract the insured value of the improvements (which should be accurate by virtue of being determined by a profitable insurance company in a competitive market) from the appraised property value (which there are generally accepted methods for figuring).
- deleted 4y ago[deleted]
- devonkim 4y agoIt’s not 100% foolproof but just a rough guide because demolition and waste disposal costs are non-zero. For someone else to use the land my house sits on someone would need to deal with the asbestos likely in various walls. Additionally, things get tricky if the land is found to have historical / archeological relevance which can stop development indefinitely. Commercial developers carry an insurance policy for this I believe.
- giaour 4y agoSort of, but that would give you the "social value" of the land, which it only has because of its present use and its proximity to other land used for specific purposes. E.g., the land under my house is worth $X because it's in a residential area in a major metropolitan area. If I were to build a dense mixed use complex on a large plot of land, I would probably increase the land value (since density would make it a desirable area). Does LVT look at a piece of land's productive value instead (i.e., how much food you could grow on it or how many minerals you could mine out of it)?
- frosted-flakes 4y agoLVT is based on location, not farming potential.
- deleted 4y ago[deleted]
- simonh 4y agoThe point of an LVT is to tax all those external factors that increase the value of the land, such as local amenities, zoning, etc. The idea is the only value added by owners of the property was the structure they built, that’s theirs, the rest of the value is in a sense un-earned. Much of it is due to government investment in infrastructure and facilities, for example. Taxing the social value is the intention.
- giaour 4y agoBut if a developer builds, say, an airport on some unattractive land outside of a city, they will create most of the value being taxed, right? The same is true to some extent for any structure.