(This article was coauthored with Greg Miller, Executive Director of the Center for Land Economics.)
While an increasing body of scholarship examines land value taxation (LVT) and Georgist economic principles, this field remains relatively underexplored relative to its theoretical significance. To support students and researchers who are interested in contributing to this area, this article outlines key empirical and legal questions that merit further investigation.
Plenty of great research has already been done, much of which is summarized in this literature review, but there are substantial opportunities to expand the knowledge frontier using new settings and modern methods. This article focuses on research that presents the most-urgent challenges Georgists, with our final section focusing specifically on research vital for LVT advocacy.
Students or researchers who are interested in researching LVT should connect with us by filling out this form. Please make sure to include your relevant skills and research interests. We maintain a registry of researchers interested in LVT, can connect you with like-minded folks, and may be able to inform you about potential sources of financial support.
To begin, we start with potential settings suitable for studying the real-world effects of implementing LVT.
I. Settings for Empirical Analysis of LVT
Unfortunately, there have been relatively few real-world implementations of LVT, which somewhat limits the availability of data that could be used for further research. However, several jurisdictions do present promising opportunities for study:
- Pennsylvania: Over the past century, approximately 20 municipalities in Pennsylvania implemented split-rate or pure LVT systems. These have been the subject of around 10 empirical studies, which we summarize here. While Pittsburgh was the subject of several of these studies, further research could focus on outcomes in other jurisdictions, including Harrisburg and Altoona. Notably, Altoona adopted a high LVT between 2011 and 2016, offering a distinct period for impact evaluation.
- Estonia: Estonia has operated a national land tax but has faced valuation challenges. A 2024 reassessment process and new caps on maximum land tax rates offer opportunities to study inter-municipal variation and assessment accuracy.
- Denmark: Høj, Jørgensen, and Schou (2018) utilized changes in municipal boundaries in 2007 to identify quasi-random variation in rates of land tax. Similar methods could be used to examine a wider range of outcomes.
- Australia: Formerly levied at the federal level, LVT is now administered by a few states. For example, Victoria expanded its LVT significantly in 2024. Comparative research across states or longitudinal analysis within Victoria could assess the effects of these changes on property markets and development.
- Hawaii’s Anti-LVT: Two counties in Hawaii impose higher taxes on improvements than on land, which is essentially an anti-LVT. This provides a useful context for examining the extent to which such tax structures discourage development.
- New Zealand: Most local governments were funded by a pure LVT in the early 20th Century, and have gradually shifted towards a traditional property tax over time (8 of NZ’s 27 local governments were still using LVT as of 2022). These differences in tax base over time and space could provide a useful setting for empirical analysis. In addition, Gemmell, Grimes & Skidmore (2019) use the amalgamation of several municipalities into a unitary Auckland Council as a natural experiment for analyzing the change from LVT to property tax.
II. Research on the Economic Effects of LVT
We typically refer to two main sources of research into the empirical effects of LVT. As mentioned above, here we have summarized a range of studies measuring the impacts of LVT in Pennsylvania. Additionally, this recent paper by Murphy & Seegert uses a clever method to analyze implicit differences in land taxes across 2000 counties across the US. These methods plus the settings described above could provide a useful basis for further research into the following research questions regarding the real-world impacts of LVT:
- Housing Outcomes: What is the impact of LVT on the type and quantity of housing that gets built, and on the trajectory of rents over time?
- Land Prices: Do high rates of LVT significantly reduce land values?
- Urban Form: To what extent does LVT influence density, infill development, and urban sprawl?
- Inequality: What are the distributional impacts of LVT on income and wealth?
- Vacancy Rates: Does LVT reduce the quantity of vacant land and empty housing?
- Displacement and Gentrification: How does LVT affect vulnerable populations? Does it reduce displacement rates, or can it accelerate gentrification under certain market conditions?
- Capitalization: How does LVT affect land-price-to-rent ratios?
III. Research to Support LVT Advocacy and Implementation
Our experience when making the case for LVT to policymakers and communities is that it is usually pretty easy to get people excited about the results discussed in the previous section. A tax system which rewards hard work, builds housing and boosts growth? Sounds great! But when the conversation turns to the hard questions of how to actually implement such a policy, we are often disappointed to see their enthusiasm rapidly deflate. This section highlights some of the research questions that are vital to help maintain momentum during LVT advocacy.
Land Valuation Methodologies: Accurate assessment of land values remains a principal challenge in advancing LVT. Even the most efficiency-obsessed economists can sometimes be heard singing the praises of LVT in theory, but lamenting that “sadly it’s impossible to accurately assess land values”.
- Can land be accurately valued? Empirical research should test the accuracy of land values derived using existing property tax data and state-of-the-art valuation methods for distinguishing land from improvements.
- What market-based mechanisms can be used to accurately value land? While Harberger-style self-assessment techniques are a promising mechanism for constructing taxable values, there is no simple way to use them to differentiate land from building values without falling into the hold-up problem. Some examples of people thinking about mechanisms that could solve this problem are Mihali Felipe here and Sam Harsimony here.
Constitutionality: At the federal level, the Constitution precludes implementation of a nation-wide LVT unless apportioned among the states according to population. At the state level, uniformity clauses often raise concerns because LVT taxes land and buildings at different rates. However, legal precedent varies by state. However, whether such a clause truly means that both land and buildings must be taxed at the same rate can depend on factors such as the rigidity of the clause, how classes of property are defined, the ability to design exemptions, and legal precedent specific to each state’s courts. A systematic review of all 50 state constitutions and judicial interpretations would offer critical guidance for LVT advocacy.
Progressivity: We also often hear queries relating to progressivity, typically expressed through concerns about the impact of an LVT on tenants, low-income homeowners (especially those in gentrifying neighborhoods), and retired widows living in their family home.
- Does LVT get passed into higher rents? In this research brief, we explain that economic theory and evidence both suggest that LVT comes out of the pockets of landowners and does not raise rents. However, there are only two empirical studies on this topic; LVT advocacy would be bolstered by further research on this question.
- Does converting property taxes into an LVT shift the tax burden towards or away from wealthier neighborhoods? The answer to this question can vary wildly depending on each city’s historic development patterns. It is therefore one of the main analyses that we conduct on behalf of specific cities, such as for South Bend here and Richmond VA here. If you’re interested in replicating this for your own city, you can find some helpful instructions here (or contact us and we’ll be happy to help!).
- Is LVT progressive with respect to income & wealth? We actually know surprisingly-little about the distribution of land ownership across the socioeconomic spectrum. For example, while the wealthiest 10% of households own 44% of America’s real estate, they also own $40 trillion in shares & equities, much of which is likely to also be tied to real estate holdings. Further research should isolate the presence of land in both property and equity holdings and trace the flow of land rents within household incomes & expenses.
Policy Design: Relatedly, there is a need for further investigation of ways to transition towards LVT in ways which maximize political viability. In our advocacy work we often encounter a strong bias towards maintaining the status quo, typically arising out of concerns about progressivity, a reflexive dislike for property taxes in general, or the backlash from those who would face higher taxes under an LVT. Analysis in this vein would likely focus on the distributional effects of various policies, ideally using data on individuals or households (such as PUMS). Policy designs to consider could include:
- Universal Building Exemption: Property taxes continue to function as-is, but with the creation of a new ‘universal building exemption’ whereby any amount of money spent on renovating or redeveloping a property generates a tax exemption which gradually expires over time.
- Progressive LVT: An shift which is designed to maximize productivity by, for example, exempting a fixed amount of land value from taxation.
- Universal Land Dividend: whereby LVT revenues are used to fund a Universal Basic Income (UBI). This approach is explained here, including example results from Canada, the UK and New Zealand.
IV. Next Steps
Clearly, there is a lot more work to be done! If you connected with any aspect of the discussion above, please consider some of the following steps:
- Fill out this form if you are interested in furthering LVT research (make sure to let us know your research interests and relevant skills)
- Check out our LVT research agenda, which is intended to serve as a more comprehensive living record of research relevant to LVT advocacy.
- If you are a student or researcher interested in advancing Georgist ideas, check out the Progress & Poverty Institute’s scholarship and grant programs.
- Please get in touch with us at shoskins@progressandpovertyinstitute.org and greg@landeconomics.org and if any of the following apply:
- If you are aware of published studies that are missing from the LVT literature review and which you believe could help to fill some of the gaps identified above
- If you are connected to, or know of, potential sources of funding for the types of research explored in this article.
