Tax Land, Not Buildings, to Spur Development
If you want less of something, tax it. That's why easing taxes on buildings can help cities grow.
This approach is part of a broader discussion on improving housing, as featured in The Rooftop, a blog and multimedia series from New America’s Future of Land and Housing program.
Local governments in the United States will collect over $2 trillion in property taxes this year, with property taxes comprising two separate taxes: a tax on buildings and a tax on land.
- A tax on buildings, which makes up around two-thirds of the total tax in a typical mid-sized city.
- A tax on land, which makes up around one-third of the total tax.
Author's summary: Taxing land instead of buildings can boost development.
Taxing buildings harms our communities by discouraging development, while taxing land helps our communities by discouraging speculation.