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No. Tenants always pay for the land value. If a new train station opens up and the costs of an apartment have not changed, you better believe the landlord will
by ItsMonkk 3y ago
No.
Tenants always pay for the land value. If a new train station opens up and the costs of an apartment have not changed, you better believe the landlord will raise prices given the raised demand from the new value associated from the train station. The monthly payment that a tenant pays has nothing to do with costs.
The effect whereby taxes are passed on happen because when you tax something you get less of it, and with less of it it moves along the supply and demand curve and so prices rise. Since the supply of land is fixed, this does not happen with land taxes.
The question then becomes do you pay the value to the landlord, or do you pay it to the community?
- gottorf 3y ago> The question then becomes do you pay the value to the landlord, or do you pay it to the community? This is the precise point, and thank you for elucidating it. With an LVT, the value of a highly-desirable piece of land inures to the community as a whole, and not whoever holds the title to that land. If the landowner wishes to come out ahead of this taxation, they are forced to improve it, whether in the form of tilling the soil, mining the minerals, or (most relevantly to our discussion) building a house or apartments on it. As a side effect, it prevents the absurdities you see in many North American cities where there's a huge surface parking lot smack dab in the middle of a dense downtown area.