[Pet_Ant]

Preosumably the closer to the city centre the higher the per square fot value so to minimise costs you move to the edge of town, thus sprawl.

[pydry]

Or you buy an apartment in a high rise and share the cost with the other residents.

It would certainly discourage the building of houses in the city centre.

[taffer]

> It would certainly discourage the building of houses in the city centre.

No, that's not how it works. The value of a property is made up of the value of the land and the value of the buildings on it. If one of these two components is taxed, its value is reduced. However, it is important to remember that the supply of land is fixed, but the supply of buildings is not. If one taxes buildings, as is the case with a traditional property tax, construction activity is reduced, but if one taxes only land, as is the case with a land value tax, construction activity is not impeded at all. That's the beauty of a land value tax: it doesn't distort anything.

With a property tax, an undeveloped lot in the center of town is taxed less than a high-rise. With a land value tax, both are taxed at the same rate. Relatively speaking, a property tax promotes sprawl, a land value tax promotes density.

[pydry]

That's essentially my point. A house in the city center which consumes the same amount of land as an apartment block would face the same tax bill.

Who would want that house with that tax bill?

[imtringued]

The bill is high because people are willing to pay it. If the neighboring properties are 3 story multifamily buildings then this one will be upgraded to a 3 story building as well.

[merrywhether]

Someone who wants to demolish it and turn it into an apartment building! That’s literally the point of LVT: incentivizing increasingly efficient usage of land in high-value areas.