A land value tax
(or site valuation tax
) is a levy on the unimproved value of land
. It is an ad valorem tax
on land that disregards the value of buildings
, personal property
and other improvements
. A land value tax (LVT
) is different from other property taxes
, because these are taxes on the whole value of real estate
: the combination of land, buildings, and improvements to the site. An LVT does
take into account the effect on land value of location, or of improvements made to neighbouring
land, such as proximity to public works or a shopping complex.
Although the efficiency of a land value tax has been known of since Adam Smith
it was perhaps most famously promoted by Henry George
in his best selling work Progress and Poverty
(1879). George argued that the value of land was created by the community, and therefore its rent belonged to the community.
Land value taxes have been implemented in Taiwan (Republic of China
), Hong Kong
, as well as in some localities in the American state of Pennsylvania
, the Australian state of New South Wales
, in Mexico
. The government of the Republic of Ireland
is considering the introduction of an LVT.