Land Value Tax

LVT2.jpgIt’s time to reform our tax system for the 21st Century. Most tax policy experts agree that Philadelphia should shift taxes toward things that can’t move (land and buildings) and away from mobile sources like workers and investors. We're asking Mayoral and Council candidates to commit to shifting the tax burden off of workers and legitimate investors, and onto greater Center City’s land speculators and vacant property holders by changing our property tax to favor improvements over vacancy.

With the 10-year tax abatement on improvements, property owners pay a small amount of property tax, mostly on the land portion of the property. Raising more of the city’s revenue from that land portion would get the city more revenue from abated properties right away for core responsibilities like education and pensions.

Philly should maintain a small millage rate on improvements, but we are asking the next Mayor and City Council to lower the rate for improvements to five times less than the millage rate for land value, in a revenue-neutral shift.

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  • Micah Kagan
    commented 2015-01-27 17:14:42 -0500

    A Land Value Tax would not cause a spike in rents, it would actually encourage denser development and increase the supply of available housing. A Land Value Tax actually taxes what is valuable – the land – as opposed to the structure that is on that land. Think of the lot at 19th and Walnut, owned by the Irish government. Right now because there is no structure on that lot, taxes are relatively low (or so I assume), but with a Land Value Tax, the owner would be forced to either build something on it to be able to pay the tax or sell it to someone who can. Also think about 20th and Market (although construction has begun there), 8th and Market (the failed Disney hole), and other parcels of valuable land in Center City that are either not developed or underdeveloped (looking at you, NW corner of 17th and Chestnut).
  • Benjamin Guiles
    commented 2015-01-13 20:11:13 -0500
    I could see this coming back around to bite the asses of renters in a city that is already favors landlords to tenants. It’s largely the low property taxes that have kept rents down in Philly as compared to cities of comparable density. Without a commensurate expansion of tenant’s rights and/or advocacy, I don’t know if I’d support this move.