Sun 19 Feb, 2017 04:11 pm
Many people complain about increasingly high price to purchase or rent a house or apartment.
I think in many cases the high price results largely from the high-market value of the land not from the high cost of constructing the apartment house or house.
The increasing price of land in turn results not from any value created by the landlord but from what the land parcel is near (location, location, location). In other words, the incremental value of the land is created by society not be the landlord.
Why don't the municipalities increase the assessed value of the land parcels and/or the tax rate assessed on the land?
1) Generate tax revenue that could defray the need for other taxes (e.g., sales tax, income tax) and to provide needed or wanted government services; and
2) Reduce the price of land.
I don't think it would increase the price of housing. I think that buyers/renters have already determined the maximum that they will pay for (the use of) land, the higher land tax would cause the increased value of land to be captured by society instead of the landlord.