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This is why you are only supposed to tax the unimproved value of land. This is different from the property tax that's commonly used by local governments in the

This is why you are only supposed to tax the unimproved value of land. This is different from the property tax that's commonly used by local governments in the U.S., which includes the value of buildings and such, and so acts as an incentive against development.

keiferski 3y ago
How is this “original unimproved” value determined? Presumably the improvements of the previous tenant have to factor in somewhere? When is the cut off point?
- jabl 3y ago
  The government keeps tabs on real estate deals and makes an estimate on the value of the unimproved land. Or for an extreme case, the government can buy some old property, demolish whatever building is left standing there, and the sell the lot to the highest bidder, giving a benchmark for land values in the area.
- ameliaquining 3y ago
  https://gameofrent.com/content/can-land-be-accurately-assessed https://gameofrent.com/content/can-land-be-accurately-assess... is a decent explanation of how this can be made to work.
- afiori 3y ago
  A method come from the sale of vacant lots (the land value is the sale price) or of buildings that are immediately demolished (the land value is the sale price minus demolition cost). Apparently even in dense cities a majority of land sales are like this.
  - MichaelZuo 3y ago
    Even a vacant lot can be 'improved', e.g. a preexisting underground utility conduit has some non-zero impact on its value. Even a literal patch of dirt, with nothing going through it, is still 'improved' in value by distant structures, e.g. if a major highway passes by a half dozen miles away. And the 'improvement' is more than a comparable patch of dirt 20 miles away. So this part of Georgism never made sense to me.
    - jabl 3y ago
      The entire point of the LVT is that the land value includes things that your neighbors (or society in general) does to make your lot more valuable.
      - MichaelZuo 3y ago
        Did you get confused with a different comment chain? In response to the parent comments, my comment indicates that it's impossible to determine the 'unimproved value', because there are no records of land values during the times of pre-human habitation of the north american continent. Hence why I said 'So this part of Georgism never made sense to me.' It's supposed to be based on literally impossible to obtain information.
        afiori 3y ago
        Under this lens "unimproved value" might be a red herring, the concept is "the market value of the lot after a complete demolition of everithing on it" or equivalently "the market price of the exclusive priviledge of being able to build things on a piece of land".
        MichaelZuo 3y ago
        Maybe you should take it up with the proponents of Georgism who use that term? And offer these reasons to switch. But just at a quick glance: "the market value of the lot after a complete demolition of everithing on it" doesn't make sense, because even a single disused subway tunnel could easily double the value of the land.
        afiori 3y ago
        There are things "on" the lot and things "around" the lot. An empty lot the right size to build a condo in front of a subway station is significantly more valuable than an otherwise identical lot 5km away from the closest subway station. A consequence is that what is built around you becomes the main factor in how many taxes you pay. Which is ok since what is build around you is also the main factor of how much value you can extract from the land you own. > Maybe you should take it up with the proponents of Georgism who use that term? the term is perfectly adeguate, for a given piece of land (like a lot you can build a condo on) you consider its value before any improvement ON it. The main conflict seems to be about either considering gigantic pieces of land or considering improvement that are not ON the piece of land but around it. For context[1]: > A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. [1] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
orthoxerox 3y ago
I've never liked the term "unimproved", since it makes people think of rich soil, mineral resources, water access as the only things that increase land value. It's easier to think about it as the tax on the improved value of all other lots except your own.
simonsarris 3y ago
A precondition of Georgism being sane is that 1 acre in downtown Manhattan must be taxed HIGH and 1 acre in Nowheresville must be taxed LOW. One is more desirable than the other. No one argues this point but sometimes they lose sight of the fact that places can go from desirable to not, or vice versa. Given this, if you improve your land, or everyone in the neighborhood improves their land, and desirability goes way up as a result, you've just raised the value of the land, improved or not. Anything you do to make the area a better place to live increases your taxes. This is a dangerous thing to put at odds. It's something a lot of pro-Georgism people ignore because they only think in steady state (Manhattan will stay Manhattan and Nowheresville will stay Nowheresville), but that's not a tenable assumption for a lot of places.
- joshjob42 3y ago
  Your benefit from building a thing on your land is far larger than the effect of that on your LVT, as much of the value spills onto neighboring land (your mall makes places nearby more valuable). Similarly if your neighbor builds something valuable you have to pay more taxes, encouraging you to put your land to its most valuable use or sell to someone who will. Every individual landowner still has a very strong incentive to put their land to good use, and their doing so will push neighbors to do the same. It helps development and funding of public goods (the LVT pays for a decent fraction of government revenues), it doesn’t hurt it. All those vacant lots will be pushed into service, inefficient land uses like parking lots or inefficient businesses or undersized apartment buildings will be pushed into renovations and rebuilds or more valuable uses. Your neighbors may not be pleased about your improvements as it ups their taxes, but we just need to defang them and put an end to all methods NIMBYs use to coerce people and prevent them from doing as they like with their own land.

keiferski 3y ago

How is this “original unimproved” value determined? Presumably the improvements of the previous tenant have to factor in somewhere? When is the cut off point?

jabl 3y ago
The government keeps tabs on real estate deals and makes an estimate on the value of the unimproved land. Or for an extreme case, the government can buy some old property, demolish whatever building is left standing there, and the sell the lot to the highest bidder, giving a benchmark for land values in the area.
ameliaquining 3y ago
https://gameofrent.com/content/can-land-be-accurately-assessed https://gameofrent.com/content/can-land-be-accurately-assess... is a decent explanation of how this can be made to work.
afiori 3y ago
A method come from the sale of vacant lots (the land value is the sale price) or of buildings that are immediately demolished (the land value is the sale price minus demolition cost). Apparently even in dense cities a majority of land sales are like this.
- MichaelZuo 3y ago
  Even a vacant lot can be 'improved', e.g. a preexisting underground utility conduit has some non-zero impact on its value. Even a literal patch of dirt, with nothing going through it, is still 'improved' in value by distant structures, e.g. if a major highway passes by a half dozen miles away. And the 'improvement' is more than a comparable patch of dirt 20 miles away. So this part of Georgism never made sense to me.
  - jabl 3y ago
    The entire point of the LVT is that the land value includes things that your neighbors (or society in general) does to make your lot more valuable.
    - MichaelZuo 3y ago
      Did you get confused with a different comment chain? In response to the parent comments, my comment indicates that it's impossible to determine the 'unimproved value', because there are no records of land values during the times of pre-human habitation of the north american continent. Hence why I said 'So this part of Georgism never made sense to me.' It's supposed to be based on literally impossible to obtain information.
      - afiori 3y ago
        Under this lens "unimproved value" might be a red herring, the concept is "the market value of the lot after a complete demolition of everithing on it" or equivalently "the market price of the exclusive priviledge of being able to build things on a piece of land".
        MichaelZuo 3y ago
        Maybe you should take it up with the proponents of Georgism who use that term? And offer these reasons to switch. But just at a quick glance: "the market value of the lot after a complete demolition of everithing on it" doesn't make sense, because even a single disused subway tunnel could easily double the value of the land.
        afiori 3y ago
        There are things "on" the lot and things "around" the lot. An empty lot the right size to build a condo in front of a subway station is significantly more valuable than an otherwise identical lot 5km away from the closest subway station. A consequence is that what is built around you becomes the main factor in how many taxes you pay. Which is ok since what is build around you is also the main factor of how much value you can extract from the land you own. > Maybe you should take it up with the proponents of Georgism who use that term? the term is perfectly adeguate, for a given piece of land (like a lot you can build a condo on) you consider its value before any improvement ON it. The main conflict seems to be about either considering gigantic pieces of land or considering improvement that are not ON the piece of land but around it. For context[1]: > A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. [1] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

orthoxerox 3y ago

I've never liked the term "unimproved", since it makes people think of rich soil, mineral resources, water access as the only things that increase land value. It's easier to think about it as the tax on the improved value of all other lots except your own.

simonsarris 3y ago

A precondition of Georgism being sane is that 1 acre in downtown Manhattan must be taxed HIGH and 1 acre in Nowheresville must be taxed LOW. One is more desirable than the other. No one argues this point but sometimes they lose sight of the fact that places can go from desirable to not, or vice versa. Given this, if you improve your land, or everyone in the neighborhood improves their land, and desirability goes way up as a result, you've just raised the value of the land, improved or not. Anything you do to make the area a better place to live increases your taxes. This is a dangerous thing to put at odds. It's something a lot of pro-Georgism people ignore because they only think in steady state (Manhattan will stay Manhattan and Nowheresville will stay Nowheresville), but that's not a tenable assumption for a lot of places.

joshjob42 3y ago
Your benefit from building a thing on your land is far larger than the effect of that on your LVT, as much of the value spills onto neighboring land (your mall makes places nearby more valuable). Similarly if your neighbor builds something valuable you have to pay more taxes, encouraging you to put your land to its most valuable use or sell to someone who will. Every individual landowner still has a very strong incentive to put their land to good use, and their doing so will push neighbors to do the same. It helps development and funding of public goods (the LVT pays for a decent fraction of government revenues), it doesn’t hurt it. All those vacant lots will be pushed into service, inefficient land uses like parking lots or inefficient businesses or undersized apartment buildings will be pushed into renovations and rebuilds or more valuable uses. Your neighbors may not be pleased about your improvements as it ups their taxes, but we just need to defang them and put an end to all methods NIMBYs use to coerce people and prevent them from doing as they like with their own land.