[nnf]

> tax the land of lot developers so they don’t hold land off the market.

This is something I dealt with a few years ago. There were a few acreage lots (5-15 acres) my partner and I were considering buying and building a house on, and all of them had been in the $200k range a year or two before but had been bought by land speculators (in some cases by the same person). Prices went from ~$200k to ~$750k, which we weren't interested in.

Most of them sold. One of the larger lots was around $350k and is still for sale, now for almost $2 million.

I don't think developers should be forced to sell land just because I want to buy it, but the taxes they pay on their empty lots is extremely low. I checked on a couple of the ~$750k lots, and the taxes were something like $115 per year. At that rate, it costs the developer/speculator basically nothing to hold onto it while prices rise.

If lots like this were taxed at, say, 20x the current rate for lots that are near areas that are being built up and are ready to be bought, then there would be a stronger incentive for the owners to sell to people who are ready to build and start paying property taxes. It seems like such an increase would benefit everyone except the speculators.

[adverbly]

Your thinking is exactly correct.

Economists have been saying this for over a century.

Look up land value taxes. They are what we need right now.

[lotsofpulp]

> It seems like such an increase would benefit everyone except the speculators.

Correct, a simple power law tax formula on unimproved/vacant land that forever increases the cost to hold onto land near and in the middle of population centers would do wonders.

[kaibee]

Really we just need a Land Value Tax.

https://www.investopedia.com/terms/l/land-value-tax.asp

[theoreticalmal]

This seems a lot like a tax on unrealized gains. You’re taxing something that might have value in the future, rather than it’s actual value now.

[Spartan-S63]

That's the idea, though. If you're sitting on an undeveloped or underdeveloped parcel of land, you should bear the cost of the value of the land. If it's in a rural area, you can probably weather the tax burden because it's worth a lot less than a surface parking lot in an urban area.

The idea behind such taxation is to destroy the deadweight losses created by land speculators. You either buy the land, develop it, and bear the weight of the tax on the fair assessment of the land's value, or you don't buy the land at all.

Property tax is predicated on the value of the structure now. Land-value taxes are predicated on the value of the land, developed or not. That will fluctuate based on the desirability of the surrounding area.

The irony is that property taxes are predicated on the value of the structure, but the practicalities of market forces are that the land is what's actually valuable. So rather than keep playing this mis-labeled game, we should embrace land-value taxes and have municipalities asses taxes without regard to the structure, just the potential economic value of the land.

[nojvek]

One could say Property taxes are like wealth taxes. You are taxing unrealized gains. But IMO it's once of the best ways cities meet their expenses and everyone pays their fair share. It keeps property prices somewhat in check because it costs money speculate.

Land that can be developed into residential lots should be appraised at a higher value. There should be a 2-4 year period where a land owner has their opportunity to develop land, but then it should be taxed at rate of nearby developed lots.

Land ownership is almost a zero-sum game and should be well regulated for efficient demand and supply. Rent-seekers don't add any value, just suck it up into their fat pockets.

[TulliusCicero]

And that's a good thing, because unlike other valuables, you can't just create or mine more land. Land is inherently valuable based on its location, you can't just get more of it somewhere and import it in.

There needs to be pressure to actually make productive use of land so that people don't just uselessly sit on it.

[JumpCrisscross]

> you can't just create or mine more land

Sure you can [1].

[1] https://en.m.wikipedia.org/wiki/Land_reclamation_in_the_Neth...

[TulliusCicero]

Ha, fair point. Though even in that case, you can only create more land at a specific point, you can't move it around like a commodity.

[lotsofpulp]

Yes, it’s called property tax, calculated by multiplying a property tax rate times assessed value of the property. Does anywhere not already have that?

[kaibee]

A property tax is typically assessed on the value of land + property, and honestly, we don't do a good job of accurately pricing the land value aspect of it. So if you don't build anything and just own the land, your property tax will be very low.

[lotsofpulp]

theoreticalmal's comment seems to imply that taxes on unrealized gains are not a thing, to which I was replying that property taxes are an example of a tax on unrealized gains. Everyone whose home has gone up in market value knows this because their property tax has surely increased over the years even though they haven't sold their home.

[sroussey]

Farther up they are talking about taxing based on what it could be worth, not what it is worth.

[woah]

Land Value Tax (the Georgeism discussed in the article) just taxes the land on what it is worth, not the buildings on it. So holding land vacant costs more because the speculator is not making any money from it, while they could be making money from a building.

A side benefit for homeowners is that improvements increase equity and resale value without raising taxes

[sroussey]

So SFH should get taxed like a high rise.

In CA there was/is a ban on SFH zoning. So at least in that case every homeowner should get taxed like at least a fourplex. Considering your wage didn’t increase that means less money for mortgage, etc., so buyers have less to spend on a house and your property goes down in value.

[sroussey]

Seems like the developer wasn’t the problem.

[chgs]

Yes the inability for society to tax the land is the problem

[sroussey]

“Society”.

Tax all land so after 6 months it is not profitable to hold. I guess after 6 months all land everywhere will be built.