Land Value Tax

A Better Alternative for a Strong Town

What is a land value tax?

A land value tax is a tax that is assessed on the value of a piece of land, rather than the value of the buildings that sit on it. Under a land tax, you are effectively taxed on the value of your location, which is mostly a result of what is nearby.

In contrast, in most American cities, property taxes are assessed on both land and buildings (“improvements”). Taxing improvement value acts as a disincentive to put land to productive use—since by increasing the value of your building, you will also increase your tax liability—and encourages land speculation. Taxing only land, or mostly land, helps resolve these issues.

Land is a community’s most precious resource. It is the base upon which our cities’ prosperity is built and sustained, and it must not be squandered.

But the property tax system in most U.S. cities encourages the wasteful and unproductive use of land. By taxing building improvements, we punish people who improve their property with higher taxes—and we reward speculators and slumlords, who can afford to let precious land sit idle or fall into disrepair.

Read our series, and watch our video, to find out how switching to a land tax can help us build stronger, more financially resilient communities.

You can also receive these articles packaged into one shareable ebook.

Thank You From a Speculator

Meet Chuck. (No, not that Chuck!) Chuck is a real-estate speculator. By taxing building improvements, we reward people like him, who can afford to sit on a vacant or underutilized lot in a prime location, do nothing with it, and watch their property value go up... and up... and up.

And for that, in this video, your buddy Chuck just wants to say, "Thanks, neighbor."

Listen to a Podcast Discussion on Land Value Taxation

Strong Towns’s work on this page was created with the generous financial support of the Robert Schalkenbach Foundation.

If you appreciate our work to spotlight policies, such as the land value tax, that can help cities and towns become more financially strong and resilient, help us make more of it by becoming a member of the Strong Towns movement.

(Cover photo via Maxpixel — Creative Commons License)