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Land Value Taxation and the Built Environment

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The main benefits of LVT (revenue-neutral municipal tax sifting off buildings onto the land below the buildings) are:

1. LVT doesn't punish businesses, landlords or home owners for fixing up, expanding, renovating, or re-purposing their buildings;
2. LVT encourages land owners to put vacant and underused land to more productive use or sell it to someone who will. This reduces downtown blight by freeing up existing urban-zoned land to productive use, (which also reduces greenfield sprawl pressure);
3. LVT makes municipally-built infrastructure self-financing by capturing more of the land value rise resulting from new infrastructure.
4. LVT increases accuracy and reduces cost of property assessment, since assessing buildings is complex, expensive and inexact.
5. LVT is farmer-friendly since it discourages value-added and pre- and post-harvest facilities on farms.
6. LVT encourages construction of affordable housing, since multi-unit construction, which is generally land-efficient, will receive tax relief.
7. LVT raises the carrying cost of holding land which lowers the upfont cost of land, reducing the size of mortgages and corresponding interest payments. Instead of payments to banks, payments go to government in lieu of other taxes making land more affordable.
8. LVT is nature-friendly as it raises the cost of holding land. This will encourage land owners to return land back to nature if they hold more than they have a use for.

LVT should be phased in over a number of years. If a senior or fixed income person is adversely affected by LVT, the municipality may defer their municipal fees till time of sale.