Q&A of the Week August 9, 2023

Question

What is a Land Value Tax (LVT)?

Answer

A Land Value Tax is also known as:

• Location Value Tax

• Point Valuation Tax

• Site Valuation Tax

• Split Rate Tax

• Site-Value Rating

An LVT is a levy on the value of the land that doesn't take into account buildings or personal property. A Land Value Tax is considered a progressive tax because the owners of the land are responsible for paying the tax, and land ownership typically denotes wealth and income.

General reasons that some support an LVT are that it may not cause economic inefficiency and it may reduce inequality. 

A drawback of an LVT includes less revenue raised by municipalities and counties used to fund operations.