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How do people separate their land value from the development value? If I see an Apple shop across from a parking lot, it may not be immediately obvious that th

How do people separate their land value from the development value? If I see an Apple shop across from a parking lot, it may not be immediately obvious that the land part of the valuations should be similar. I could see the crowd systematically getting this wrong. Having said that, it's not a damning criticism. I think LVT is a good idea, and people are generally going to know what piece of land is worth more than another. You can then stitch the relative values to some sort of exchange-based anchoring to give your map real dollar values. I do tend to think a Harberger system makes a lot of sense, though. Maybe something a little bit like: - Everyone puts a value on their land. We take the total, figure out what percentage needs to be taken, and everyone pays their share of the tax take accordingly. - Your land is for sale at the price you put, but you can change up the price if you don't want to sell it, and thus pay up extra tax. If you have land set at 1M and someone comes and offers 1M, but you don't want to sell, you can pay the tax at whatever price is too high for him, eg 2M would double your tax. The offer needs to be firm so that you have an actual choice, someone can't just double your tax bill on a whim.

jstanley 1y ago
But just because my land is worth £100k doesn't mean I should be forced to sell the house that is on it for only £100k! If you must have that sort of system, there probably ought to be an obligation on the buyer to first pay to have the entire existing structure demolished.
- deleted 1y ago
  [deleted]
- lordnacho 1y ago
  Hmm that's a good point actually. Gets hard to separate the land from the stuff on it.
- ajb 1y ago
  That seems a rather pyhrric right. You don't actually get any value from them destroying your house. I think the offer is supposed to be on the improved value (IE including the value of the building) but the tax is on the unimproved value, so you do get the value of your house if they buy the land. Perhaps more reasonable would be, if we imagine a new Georgist city on undeveloped land, to require that every building is detachable from the land; IE it is attached to its foundations, by twistlocks, like intermodal containers, with the utilities also being supplied via some standardised connector. Not only would you then just be able to move your house to somewhere else, but it would have several other advantages. It would be a universal argument against NIMBYism - if you don't like new infrastructure being built near you, you can just move your house elsewhere. It would make it less disruptive to build new infrastructure anyway, as houses could be moved out of the way instead of being demolished.
  - jstanley 1y ago
    The point of the system where you have to accept an offer at your supposed valuation is that it forces accurate valuations. If you now say that we need to provide two different valuations (land + structure) but we're only taxed on one, don't you think we'll find that everyone lives in very expensive houses on worthless plots of land?
    - ajb 1y ago
      No, because it's much easier to independently value a house What are you suggesting as an alternative? - Both taxation and offer on the improved value - this is consistent, but it's no longer Georgism so it doesn't solve the problem of how to estimate and tax the unimproved value - Both taxation and offer on the unimproved value - this is now unfair to the owner as you're not paying for the value of their house, and also they have the incentive to include the value of the house in the land value
      - jstanley 1y ago
        > What are you suggesting as an alternative? No mandatory acceptance of offers, land valuation by fiat.
  - beeflet 1y ago
    >to require that every building is detachable from the land; IE it is attached to its foundations, by twistlocks, like intermodal containers, with the utilities also being supplied via some standardised connector. WHAT? This is ridiculous. What happens if someone buys the land out from under your skyscraper, and you can't afford to move it a couple blocks over? Do you live in a LEGO world?
    - ajb 1y ago
      It's a thought experiment, being angry at it doesn't add any value.
- giantg2 1y ago
  You could technically separate the house from the land using separate deeds and deed restrictions. That could create an interesting workaround that would effectively render the value of the land useless for most lots, thus avoiding the taxes.
- beeflet 1y ago
  >But just because my land is worth £100k doesn't mean I should be forced to sell the house that is on it for only £100k! Then you could "value" the land at £200k and pay a higher property tax to secure that preference. In other words, your property is more valuable, to you. >If you must have that sort of system, there probably ought to be an obligation on the buyer to first pay to have the entire existing structure demolished. I think you are right, which is a problem. Or you could stipulate that all the buildings are demolished before the land bought in this manner is used. I think this system would evolve into people overvaluing their land to be between the land and the land+building value, and then keeping a public offer for the land+building value. That strategy would minimize the land-only sales and encourage buyers to buy the entire building instead.
  - jstanley 1y ago
    > In other words, your property is more valuable, to you. That's fine, but then it becomes a property tax rather than a land value tax.
ajb 1y ago
Improvement value is commonly estimated, eg by insurance companies. Eg, you insure your building for 100k even though the market price was 300k, because it would only take 100k to rebuild it. So you then know that the 'unimproved' value was 200k. (This ignores dilapidations etc that you'd also have to account for).
- bombcar 1y ago
  This often undervalues the land as a side note - because an empty lot is more valuable than the same land under an “undesirable” structure (because demolition comes at a cost) - even if it’s perfectly serviceable.
pydry 1y ago
The calculation of land value isnt the hard part. There's a good description of how on the wikipedia page. The hard part is that its implementation would cause a significant (& possibly violent) backlash from land owners intent on defending their privilege.
- Aurornis 1y ago
  The value of my land is already evaluated separately from the value of my house by my county. I already pay a land value tax. I also pay a tax on the house. The same goes for commercial properties here. Is this really not common? I constantly see internet claims about how it would cause violent uproar from evil land owners if we taxed land value, but as a land owner I can tell you it’s already happening. Switching to a full land value tax would just redistribute the taxation entirely on to the land and make the structure tax free. That would be awesome for the people with giant, new construction houses around me but not so good for those of us with smaller, older construction buildings in the same neighborhoods. It would be really bad for the old people living out their final years in their modest old houses which need a lot of repairs (and therefore have low structure grades in the tax system and low structure taxation).
  - pydry 1y ago
    >Is this really not common? I constantly see internet claims about how it would cause violent uproar from evil land owners if we taxed land value, but as a land owner I can tell you it’s already happening. LVT does exist in several places in the world but it's usually around ~3-5%. Unusually for most taxes, it can be raised probably to almost 100% without any economic ill effects, but the land ownership classes would raise absolute hell. This is how their propaganda mouthpieces reacted in the UK at the proposal: https://archive.ph/6gtRC https://archive.ph/6gtRC >That would be awesome for the people with giant, new construction houses around me but not so good for those of us with smaller, older construction buildings Not sure why you feel specifically singled out, but ok. It would be most awesome for people living in high density apartments and least awesome for people who live in crappy low density housing in high value areas which ought to be converted to apartments. >It would be really bad for the old people living out their final years in their modest old houses which need a lot of repairs (and therefore have low structure grades in the tax system and low structure taxation). Only if you pretend that those people can't move, and they would. Those people would just downshift to apartments in response - this used to be a lot more common anyway - my grandmother did this. If you want somebody to feel sorry for, though, feel sorry for old people living out their final years in rented accomodation. If you rent, by definition, you have to pay LVT (to a private landlord), and if you can't pay - to the street for you.
immibis 1y ago
Let's suppose I have a billion trillion dollars and I hate all people who live in Springfield. Could I just bid ten million on every Springfielder's house and they all get forced to move out with no choice?
- lordnacho 1y ago
  They'd love that, wouldn't they? You'd have to pay them and I would think ten million is way more than you'd get for your house.
  - giantg2 1y ago
    For $10M? Maybe. But the real scenario is they hire analysts to figure out what price in taxes you can't afford and bid the house price that will force you to sell at the lowest cost to them.
- giantg2 1y ago
  Yeah, imagine pissing off a person and they put a bid in just high enough to raise your taxes but not high enough to make selling worth it.
  - beeflet 1y ago
    ideally this would always happen equally everywhere, such that everyone is forced to list an accurate price. If you are low-balling the price to save on taxes, you run the risk that someone swoops up your property for cheap.
    - giantg2 1y ago
      This situation isn't about an accurate price. This is an example of how to abuse the process to increase someone's taxes without the intention of buying.
      - beeflet 1y ago
        The whole point of this system is price discovery. You can't submit bids in this system without the intention of buying, if you have the highest bid you're forced to buy.
giantg2 1y ago
"Your land is for sale at the price you put, but you can change up the price if you don't want to sell it, and thus pay up extra tax." This is how you end up with homeless seniors and disabled people. In my opinion, we shouldn't be working up schemes to force people out of their property. Otherwise you get a developer that comes in and offers you a price you literally can't refuse, pushing the market entirely in favor of the wealthy.
- WillDaSilva 1y ago
  If they sell their land, then presumably they'd receive a substantial windfall with which they could buy a new cheaper place, or rent. If they don't receive a substantial windfall, then the amount they were paying for the LVT must've been low.
  - giantg2 1y ago
    "If they sell their land, then presumably they'd receive a substantial windfall with which they could buy a new cheaper place, or rent." Not really. You might be forcing someone out of a 2.5% mortgage into a 6% mortgage on a new property, incurring property transfer taxes, moving costs, loan underwriting, and other fees. You very well could lose money in some situations. Your argument also assumes they are not in the cheapest homes already. If they are, they could be forced out of the geographic area altogether if there are no cheaper homes (and inherently rents will be more expensive than the cheapest mortgages under that system).
  - HDThoreaun 1y ago
    Land is worthless under LVT. Its entire revenue stream is captured by the tax, an asset without revenue is definitionally worthless.
- beeflet 1y ago
  seniors and disabled people can't just live somewhere cheaper? I think they should be pushed out by the wealthy. If you're holding onto residential land in a developing city, and someone wants to build a skyscraper there they should be able to buy you out at a reasonable price. You shouldn't be able to hold land hostage while also paying low property tax
Aurornis 1y ago
> How do people separate their land value from the development value? This was already done in every place I’ve ever lived. The local assessor has rules and algorithms for valuing land and valuing structures for tax purposes. Insurers do the same. It’s so common that I’m confused about why it’s a sticking point in these conversations. I think a lot of LVT proponents don’t even understand that land is currently taxed in many (most?) places. Switching to a pure LVT would just make the structures free from taxation and redistribute the missing tax revenue on to the pure land value. Great for people with big, nice, new houses who would get to shift some of their tax burden to their neighbors with smaller, older, less nice houses on similar land.

jstanley 1y ago

But just because my land is worth £100k doesn't mean I should be forced to sell the house that is on it for only £100k! If you must have that sort of system, there probably ought to be an obligation on the buyer to first pay to have the entire existing structure demolished.

deleted 1y ago
[deleted]
lordnacho 1y ago
Hmm that's a good point actually. Gets hard to separate the land from the stuff on it.
ajb 1y ago
That seems a rather pyhrric right. You don't actually get any value from them destroying your house. I think the offer is supposed to be on the improved value (IE including the value of the building) but the tax is on the unimproved value, so you do get the value of your house if they buy the land. Perhaps more reasonable would be, if we imagine a new Georgist city on undeveloped land, to require that every building is detachable from the land; IE it is attached to its foundations, by twistlocks, like intermodal containers, with the utilities also being supplied via some standardised connector. Not only would you then just be able to move your house to somewhere else, but it would have several other advantages. It would be a universal argument against NIMBYism - if you don't like new infrastructure being built near you, you can just move your house elsewhere. It would make it less disruptive to build new infrastructure anyway, as houses could be moved out of the way instead of being demolished.
- jstanley 1y ago
  The point of the system where you have to accept an offer at your supposed valuation is that it forces accurate valuations. If you now say that we need to provide two different valuations (land + structure) but we're only taxed on one, don't you think we'll find that everyone lives in very expensive houses on worthless plots of land?
  - ajb 1y ago
    No, because it's much easier to independently value a house What are you suggesting as an alternative? - Both taxation and offer on the improved value - this is consistent, but it's no longer Georgism so it doesn't solve the problem of how to estimate and tax the unimproved value - Both taxation and offer on the unimproved value - this is now unfair to the owner as you're not paying for the value of their house, and also they have the incentive to include the value of the house in the land value
    - jstanley 1y ago
      > What are you suggesting as an alternative? No mandatory acceptance of offers, land valuation by fiat.
- beeflet 1y ago
  >to require that every building is detachable from the land; IE it is attached to its foundations, by twistlocks, like intermodal containers, with the utilities also being supplied via some standardised connector. WHAT? This is ridiculous. What happens if someone buys the land out from under your skyscraper, and you can't afford to move it a couple blocks over? Do you live in a LEGO world?
  - ajb 1y ago
    It's a thought experiment, being angry at it doesn't add any value.
giantg2 1y ago
You could technically separate the house from the land using separate deeds and deed restrictions. That could create an interesting workaround that would effectively render the value of the land useless for most lots, thus avoiding the taxes.
beeflet 1y ago
>But just because my land is worth £100k doesn't mean I should be forced to sell the house that is on it for only £100k! Then you could "value" the land at £200k and pay a higher property tax to secure that preference. In other words, your property is more valuable, to you. >If you must have that sort of system, there probably ought to be an obligation on the buyer to first pay to have the entire existing structure demolished. I think you are right, which is a problem. Or you could stipulate that all the buildings are demolished before the land bought in this manner is used. I think this system would evolve into people overvaluing their land to be between the land and the land+building value, and then keeping a public offer for the land+building value. That strategy would minimize the land-only sales and encourage buyers to buy the entire building instead.
- jstanley 1y ago
  > In other words, your property is more valuable, to you. That's fine, but then it becomes a property tax rather than a land value tax.

ajb 1y ago

Improvement value is commonly estimated, eg by insurance companies. Eg, you insure your building for 100k even though the market price was 300k, because it would only take 100k to rebuild it. So you then know that the 'unimproved' value was 200k. (This ignores dilapidations etc that you'd also have to account for).

bombcar 1y ago
This often undervalues the land as a side note - because an empty lot is more valuable than the same land under an “undesirable” structure (because demolition comes at a cost) - even if it’s perfectly serviceable.

pydry 1y ago

The calculation of land value isnt the hard part. There's a good description of how on the wikipedia page. The hard part is that its implementation would cause a significant (& possibly violent) backlash from land owners intent on defending their privilege.

Aurornis 1y ago
The value of my land is already evaluated separately from the value of my house by my county. I already pay a land value tax. I also pay a tax on the house. The same goes for commercial properties here. Is this really not common? I constantly see internet claims about how it would cause violent uproar from evil land owners if we taxed land value, but as a land owner I can tell you it’s already happening. Switching to a full land value tax would just redistribute the taxation entirely on to the land and make the structure tax free. That would be awesome for the people with giant, new construction houses around me but not so good for those of us with smaller, older construction buildings in the same neighborhoods. It would be really bad for the old people living out their final years in their modest old houses which need a lot of repairs (and therefore have low structure grades in the tax system and low structure taxation).
- pydry 1y ago
  >Is this really not common? I constantly see internet claims about how it would cause violent uproar from evil land owners if we taxed land value, but as a land owner I can tell you it’s already happening. LVT does exist in several places in the world but it's usually around ~3-5%. Unusually for most taxes, it can be raised probably to almost 100% without any economic ill effects, but the land ownership classes would raise absolute hell. This is how their propaganda mouthpieces reacted in the UK at the proposal: https://archive.ph/6gtRC https://archive.ph/6gtRC >That would be awesome for the people with giant, new construction houses around me but not so good for those of us with smaller, older construction buildings Not sure why you feel specifically singled out, but ok. It would be most awesome for people living in high density apartments and least awesome for people who live in crappy low density housing in high value areas which ought to be converted to apartments. >It would be really bad for the old people living out their final years in their modest old houses which need a lot of repairs (and therefore have low structure grades in the tax system and low structure taxation). Only if you pretend that those people can't move, and they would. Those people would just downshift to apartments in response - this used to be a lot more common anyway - my grandmother did this. If you want somebody to feel sorry for, though, feel sorry for old people living out their final years in rented accomodation. If you rent, by definition, you have to pay LVT (to a private landlord), and if you can't pay - to the street for you.

immibis 1y ago

Let's suppose I have a billion trillion dollars and I hate all people who live in Springfield. Could I just bid ten million on every Springfielder's house and they all get forced to move out with no choice?

lordnacho 1y ago
They'd love that, wouldn't they? You'd have to pay them and I would think ten million is way more than you'd get for your house.
- giantg2 1y ago
  For $10M? Maybe. But the real scenario is they hire analysts to figure out what price in taxes you can't afford and bid the house price that will force you to sell at the lowest cost to them.
giantg2 1y ago
Yeah, imagine pissing off a person and they put a bid in just high enough to raise your taxes but not high enough to make selling worth it.
- beeflet 1y ago
  ideally this would always happen equally everywhere, such that everyone is forced to list an accurate price. If you are low-balling the price to save on taxes, you run the risk that someone swoops up your property for cheap.
  - giantg2 1y ago
    This situation isn't about an accurate price. This is an example of how to abuse the process to increase someone's taxes without the intention of buying.
    - beeflet 1y ago
      The whole point of this system is price discovery. You can't submit bids in this system without the intention of buying, if you have the highest bid you're forced to buy.

giantg2 1y ago

"Your land is for sale at the price you put, but you can change up the price if you don't want to sell it, and thus pay up extra tax." This is how you end up with homeless seniors and disabled people. In my opinion, we shouldn't be working up schemes to force people out of their property. Otherwise you get a developer that comes in and offers you a price you literally can't refuse, pushing the market entirely in favor of the wealthy.

WillDaSilva 1y ago
If they sell their land, then presumably they'd receive a substantial windfall with which they could buy a new cheaper place, or rent. If they don't receive a substantial windfall, then the amount they were paying for the LVT must've been low.
- giantg2 1y ago
  "If they sell their land, then presumably they'd receive a substantial windfall with which they could buy a new cheaper place, or rent." Not really. You might be forcing someone out of a 2.5% mortgage into a 6% mortgage on a new property, incurring property transfer taxes, moving costs, loan underwriting, and other fees. You very well could lose money in some situations. Your argument also assumes they are not in the cheapest homes already. If they are, they could be forced out of the geographic area altogether if there are no cheaper homes (and inherently rents will be more expensive than the cheapest mortgages under that system).
- HDThoreaun 1y ago
  Land is worthless under LVT. Its entire revenue stream is captured by the tax, an asset without revenue is definitionally worthless.
beeflet 1y ago
seniors and disabled people can't just live somewhere cheaper? I think they should be pushed out by the wealthy. If you're holding onto residential land in a developing city, and someone wants to build a skyscraper there they should be able to buy you out at a reasonable price. You shouldn't be able to hold land hostage while also paying low property tax

Aurornis 1y ago

> How do people separate their land value from the development value? This was already done in every place I’ve ever lived. The local assessor has rules and algorithms for valuing land and valuing structures for tax purposes. Insurers do the same. It’s so common that I’m confused about why it’s a sticking point in these conversations. I think a lot of LVT proponents don’t even understand that land is currently taxed in many (most?) places. Switching to a pure LVT would just make the structures free from taxation and redistribute the missing tax revenue on to the pure land value. Great for people with big, nice, new houses who would get to shift some of their tax burden to their neighbors with smaller, older, less nice houses on similar land.