Here's one idea. Effective land tax drives the sale price to 0, so it may be better to make taxes absolute, not relative to value. When someone wants to give up land because the taxes are too high, they just tell the city government. From that point, the tax goes down over time until someone decides to take the land at the current (absolute) tax rate. The old owner still pays the tax and can use the land in the meantime.
> If anything it seems like it would be much easier than the current property tax assessment scheme.
Explain how it can be easier?
If valuation is based on sale price of the property or nearby comparable properties, those are objective numbers. A sale actually happened, at that price. So it was worth that much to someone. No room for argument.
A LVT gives power to the government to unilaterally declare that in some alternate universe, your plot of land might be worth a lot more, so they'll just go right ahead and tax you on that speculative amount in the absence of any evidence.
Are empty plots not bought and sold? Are properties not bought and sold for demolition and redevelopment? Can you not compare the sale price of similar properties with similar plots in different locations to get estimates for the land value?
What about using insurance estimates for rebuilding costs? If my house is insured for a rebuilding cost of $500,000 and I bought it for $1,500,000, isn't $1,000,000 a reasonable estimate of the land value?
> A LVT gives power to the government to unilaterally declare that in some alternate universe, your plot of land might be worth a lot more
Only if the law for some bizarre reason gives unilateral power to the government to declare the land value for plots arbitrarily
You could say exactly the same thing about property taxes currently. Why could the government not unilaterally declare your property is worth 10x? Because that's not how it works
> You could say exactly the same thing about property taxes currently. Why could the government not unilaterally declare your property is worth 10x? Because that's not how it works
Right, that's not how it works when the tax is based on the sale prices of the property itself and/or comparable nearby properties. Those are market clearing prices, so it demonstrates actual people were actually willing to pay that price, so it is realistic.
The county can't say your property is worth 10x overnight, because there is proof that it is not, in the form of the public records of comparable sales nearby in the last few months.
But with LVT the claim is that the tax should be based on a theoretical value of what it might be worth if someone build something else there, like a high rise apartment tower. It is speculative, since the building doesn't exist. That's completely unfair.
Well no, because people sell entire houses so you can use that to anchor valuations. LVT is only taxing part of the purchase, much harder to disentangle.
Not at all, and any property assessor will tell you this (e.g. property assessments usually already separate land vs improvements). Nearly all houses are insured, so it's easy to calculate land value as sales price - insured value, basically because insurance only covers the cost of the house.
Plus, nearly all locales either have empty lots that are sold, or if there is no more room have houses that are sold as teardowns, and in either case that gives you an unambiguous land value.
The thing about land is that there are a million reasons why one lot might be worth a different amount than one next door. A single lot selling in a neighborhood tells you little about the rest of the land prices in the area because of that. Maybe that lot is on a hill or next to a busy street or everyone knows the neighbor is a giant asshole. All these things change the price on a micro level and are impossible to disentangle.
Assessment definitely isn't easy, but some fairly simple solutions exist.
For example, people could self-assess their land's value. To stop people low-balling the assessment, the Government could have an option to purchase the land at some % above the assessed price and then on-sell it. This way all valuations are linked to a market price rather than a bureaucratic process.
