How land value tax could fix the housing crisis | World Economic Forum

Land value tax incentivizes landowners to improve their land and has been shown to boost housing supply, experts say.

Land value tax is a tax on a piece of land, rather than the property sitting on top of it.

How does it work?

Land value tax is generally based on the “unimproved” value of the land. So essentially the land in its natural state, with no buildings on it.

This means the owner of a vacant plot of land would pay the same amount of taxes as a neighbouring owner with a block of apartments on their land.

With property taxes, owners who improve their properties can be taxed more. This disincentivizes investment.

With land taxes, property improvements aren’t taxed. Owners are encouraged to make improvements, to increase returns from their land...