Taxing land values stimulates smart growth
Oregon-Washington chapter of Common Ground USA
We promote legislation that democratizes use of land and natural resources in these two states — that treats land and natural resources more like a commonwealth for the productive use of all residents, rather than as a commodity to be speculated on and for generating unearned income.
Taxing private use of land and natural resources keeps prices low and stable, to better share ownership and encourage productivity (“highest and best use”).
Take a look at our Legislative Action tabs for more information about our current focus!
NEWS FROM B.C. CANADA: PROPOSALS TO TAX LAND SPECULATION
Housing affordability is a ‘huge driver’ in the upcoming provincial election, May 9. An April opinion poll suggests the majority of voters are unhappy with the B.C. Liberals handling of unaffordable housing costs. Housing prices in Vancouver jumped by more than 40 per cent in a single year, and detached homes now fetch well over $1-million.
“Housing is a necessity, not a luxury”. This is an opportunity for the NDP, if they have a credible plan.
A ‘radical tax shift could cool the market’, says U. of Missouri economist Michael Hudson in a speech to Vancouver residents on 11 April. “Who is going to benefit from rising housing prices, the people of Vancouver or real-estate developers and banks?” “When housing prices rise, all that windfall ends up getting paid to banks as mortgage interest. This is not a natural law; it is the result of bad tax policies. All these windfall gains could be taxed, and that would keep housing prices down.”
Back in 1974 Ontario brought in a land speculation tax as an effort to discourage the flipping of properties, but the realtors managed to get it scuttled.
The current B.C. election is going to be a tight contest; the NDP and the Greens are gaining in the polls. Just last week the NDP revealed its party’s platform, reviving the speculation tax.
B.C.’s New Democrats are promising to impose a 2 percent annual tax on property speculators who don’t pay income tax in the province, which the party says will be more effective than a levy on foreign buyers introduced last year by Christy Clark’s Liberal government. The party says the tax would raise $200-million – a projection linked to a study by the University of British Columbia Sauder School of Business. The tax would be based on assessed property values and proceeds would go to a housing affordability fund.
The B.C. Green Party unveiled its platform on April 11. It is proposing to tax capital gains on home sales, and implement a 12 percent transfer tax on properties valued above $3 million. The Greens suggest that when a seller’s lifetime capital gains reach in excess of $750,000, that profit should be taxed.
From CG-ORWA: Remember… Windfalls and capital gains all derive from land value, the unearned increment of real estate. Dampen housing price inflation by shifting property taxes off building values onto land values!
B.C. minister Peter Fassbender proposes ‘transit-supporting levy’
VANCOUVER — Special to The Globe and Mail
Published Thursday, Feb. 09, 2017 10:01PM EST B.C.’s TransLink Minister is exploring whether to require developers who build dense projects near transit to contribute some of their profits back into the transportation system.
Peter Fassbender’s proposal for a “transit-supporting levy,” which he has been pitching to cities and developers, is the latest idea for how to continue expanding transit in a huge region with a growing population, but where local governments have few ways to raise money for major infrastructure projects.
“If you build transit corridors and you invest billions of dollars in transportation, there is a benefit to densification as a result of that, and should a portion of that benefit accrue to the very transportation corridors that have helped to build that?” Mr. Fassbender said in an interview.
Mr. Fassbender said he has already conducted two roundtables about the idea in the past six months with cities, developers and others, and he is planning another one for this month. He acknowledged that one of the big challenges of this new levy is possible resistance from municipalities, who will worry that the province is taking away revenue that some of them are already using to solve other problems.
The minister’s suggestion follows years of fierce debates over funding transit improvements, including a failed plebiscite two years ago that rejected an additional sales tax in the Vancouver region. Other ideas have included additional gas taxes, a regional carbon tax, a vehicle levy or mobility pricing – a complex system for charging drivers based on where and how far they drive. The province has rejected most of those.
Other cities, notably Metro Toronto, have considered this kind of “land-value capture” system for financing transit, as well. Some look to the City of Vancouver’s existing method of community-amenity contributions as a model. Vancouver negotiates with developers to give back community benefits equivalent to 75 per cent of the land-value increase they see when their land is rezoned.
Vancouver is especially likely to be concerned how its approach would be disrupted by a new transit levy.
- Critiques of the Property Tax3
- Current Legislation1
- General Legislation3
- International Interest5
- Journal Publications2
- Laws & Bills in Other States1
- Oregon Voices1
- Our Legislative Action3
- Research Reports1
- Value Capture3
- Working Papers1