It depends on the implementation, but generally it actually would cover these things.

If the land tax is identical between an apartment complex with 1,000 people and one across the street in a different school district with 10,000 people then it can’t.

In such a case I think it wouldn’t be possible to have those two buildings be taxed exactly the same per-person because by virtue of 10,000 people living in an equivalent lot you’re demonstrating that the land value is quite high and so the 1,000 person lot would have to be adjusted significantly. You’d have to actually cram that many people onto a lot too, which means you are looking at a location like Manhattan level density in which case it’s very unlikely that a 1,000 person property isn’t paying significant land value taxes.

I’m sure we can come up with contrived examples of things, but be open-minded to how things could work.

First absolute density isn’t relevant in my example as a single property could hold 10,000 garden style apartments or 1,000 single family homes etc.

Anyway, it’s not that property taxes are 1:1 with population, however it does broadly correlate with density. A farmer next to a subdivision is a more extreme version of the same thing that only represents which farmer happened to sell their land. Meanwhile a farm is less value per acre than a housing development. Just as high rises represent more value per acre than garden style apartments and garden style apartments beat single family homes.

Land value taxes on the other hand ignore all such differences by design. The farmer pays the same amount per acre as the subdivision next door. LVT can capture increases in value as regions develops, but those increase don’t line up with political borders.

You are mistakenly believing that LVT means that two lots of the same size are taxed the same rate.

Two equivalent lots next to each other should taxed the same or very close to it.

Beachfront vs non beachfront isn’t equivalent, but two random fields in Northern Virginia next to each other with similar features should be. Anyway, LVT definitely doesn’t care about what you built on the property so this distinction just doesn’t matter.

> Two equivalent lots next to each other should taxed the same or very close to it.

Yes… but you can’t just look at vacant lots in abstract. If you have two lots and they are taxed the same or similarly, either the owners pay the tax, or they sell the lot because they aren’t providing enough economic value to afford the tax, or someone who has a better economic idea buys the lot to improve it.

In your example of the similar lots you demonstrated this, but drew the wrong conclusion. You realize economic value from the 10,000 people on Lot A because the owner had to either improve it or sell it so that it produced economic value.

> Beachfront vs non beachfront isn’t equivalent

Right, which is why they’d be taxed differently… depending on other factors. L

> Anyway, LVT definitely doesn’t care about what you built on the property so this distinction just doesn’t matter.

That’s exactly the wrong conclusion! LVT cares more than any other tax system because the tax revenue is reflective of the economic value of the property.

> LVT cares more than any other tax system because tax revenue is reflective of the economic value of the property.

This is false, LVT only cares about the hypothetical economic value not the actual economic value.

Let’s say you buy some farms in the middle of nowhere for 10k/acre and put a theme park on it. Your LVT taxes are in theory unchanged, though depending on how it’s calculated the value of land around that property increases because it’s near a theme park. Then your LVT increases when people start to build hotels etc around your property.

What’s interesting about this model is your incentivized to develop land as a single unit. A sports stadium with associated shops and hotels is valued as if none of it was there, but split it up and each pays more due to proximity to other businesses.

And of course what improvements are included or excluded is rather arbitrary. Do you value a natural or artificial pond differently?

> This is false, LVT only cares about the hypothetical economic value not the actual economic value.

No, it’s not false. It’s the fundamental characteristic of LVT. There is no separation of the hypothetical and actual.

> Let’s say you buy some farms in the middle of nowhere for 10k/acre and put a theme park on it. Your LVT taxes are in theory unchanged, though depending on how it’s calculated the value of land around that property increases because it’s near a theme park. Then your LVT increases when people start to build hotels etc around your property.

Right. That’s the point. You buy land and the taxes are such that you must improve the land or otherwise produce economic value to be able to hold it. As land around the theme park becomes more valuable taxes eventually go up and then the economic value of the park must continue to increase in order to support the taxes (at the same profit level).

> What’s interesting about this model is your incentivized to develop land as a single unit. A sports stadium with associated shops and hotels is valued as if none of it was there, but split it up and each pays more due to proximity to other businesses.

I’m not following this very well. I think it makes you think more holistically, but I am not tracking well that building a sports stadium and shops and hotels would cause the value to be as though nothing is there. Can you elaborate? I would think that someone developing the parcel to include all of these things would be doing so to decrease risk, increase economic engagement so they can afford taxes at a specific, desired profit level.

> There is no separation of the hypothetical and actual. > Can you elaborate?

To simplify.

If it’s the actual economic value then the city would include your neighbor who’s brown lawn slightly decreases your property values and a million other factors nobody can actually account for. It’s always going to be calculated based on some simplified model or the best guess of some accessor.

Even stepping into the abstract some choices are just arbitrary. Do you decrease the LVT of a superfund site? What if someone drained swampland so the land it’s self is more valuable?

Why would it be identical? If one's in a better school district, then that would be a good reason for one to be of greater value than the other. That the one in the other school district has sufficiently higher demand that it has ten times the residents as the complex across the street further suggests a higher land value and therefore higher LVT.

I could have just as easily said the higher population density property had a lower LVT as it’s an arbitrary choice. Perhaps the higher population density is in the worse school district as the better one. Hell the district boundaries my have changed last week specifically to shift the burden to a different school district.

So sure, it’s of course possible for properties next to each other to have significantly different values per acre, but nothing says the higher density one must have a higher or lower value so let’s just assume their identical for simplicity. Any way you slice it it’s clear LVT doesn’t care about the actual population on the land.

> nothing says the higher density one must have a higher or lower value

Local population (incl. the density thereof) is arguably the driver of value, moreso than any other factor besides sheer size and maybe location (in exceptional cases, e.g. adjacent to a coastline). If you could build a store or a restaurant anywhere, then all else being equal, would you build it where there are 10,000 potential customers within walking distance or where there are merely 1,000? Likewise, are you going to move where there are lots of places to eat and shop or where there are few? Generally people want to be where other people are, and this produces a positive feedback loop between local population and demand for land; there are exceptions, of course (some people like to live away from population centers instead of in the middle of them), but they ain't numerous enough to meaningfully suppress that feedback loop.

That breaks down when your dealing with properties next to each other. The surrounding area can easily dwarf the difference a single property makes here.

Assuming all things where equal the lower population density one might be assessed at a higher LTV because it’s next to a higher population density and the higher population density one would be assessed lower because it’s next to a low population density one.

But the actual effect depends on many factors, being next to poor people generally lowers property values etc.