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Comment by astrange | Hacker News Reader

It would make it better, because a property tax punishes improving your property and a land value tax doesn't, so it would make it easier to build apartments where the land value is high and reduce competition for houses where it isn't.

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Haven't read the whole LVT thing too deeply but wouldn't it make single households a time bomb? Say I buy a house on the suburbs of a city, 20 years later the city has grown to the point that I'm no longer part of the suburb but inside the city, which means that my taxes would skyrocket because I have an "underdevelop" lot, even though, as a single individual, I don't have the capital to build a higher density complex to cope with the higher taxes

But that already happens with property taxes - just look at all the people in California who can only afford to live where they do because their property taxes are fixed at their original rate, and so they cannot afford to move anywhere else within the same area.

The best approach there isn't to lower taxes (although a deduction for a primary household is fine of course) but to allow them to defer payment until it's sold/they die. Since in this situation their house is also worth several million dollars.

Which then significantly exacerbates the potential for a negative equity trap, because moving now requires paying all of those deferred taxes. So the longer you've lived somewhere the more you need to down-value when you move...

I think that's the point. If you live in a high cost of living area you would sell your house and it would be replaced with multi unit housing that would bring down the local cost of living

Yes but that means your home is now worth a fortune and you can sell it for a windfall.

You’re making the assumption that the current property tax would end and be replaced. Unless this was all done at the county level, that most likely wouldn’t happen. Even then, many jurisdictions would just double tax. They’d argue that one tax was for land and the other for the dwelling. For the poor who lived in an area that was once cheap, they’d simply lose their homes if they haven’t already as they’d be unable to pay these taxes.

I don't think anyone has ever wanted both a land and building value tax.

Well, there are wealth tax proponents but I don't believe in those - land taxes are the only good kind of them.

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