What is the soil value?

Soil tax is a type of real estate tax AD Valorem. Only the soil itself is taxed; All buildings or improvements on the ground are excluded from the tax calculation. This is, unlike many other forms of real estate tax.

Adam Smith, a British economist of the 18th century, was in his work tax on the land value, wealth of nations . In the United States, Henry George, the 19th century reformer, was the most famous activist for the tax on the value of land value. George believed that taxation of soil value would eliminate the need for other taxes.

The landing of land value has advanced several arguments in their favor. One argument is that it promotes the improvement of structures placed on the ground. Usually such improvements would be taxed, which discourages the landowner from performing high quality improvements. Another argument is that the land value reduces soil speculation and prevents investors from removing a large amount of land from the market.Dy and stimulate suburban growth.

The third argument in favor of the tax value is its impact on real estate and housing prices. Proponents say that alternative forms of real estate taxation make it difficult to build affordable housing. They also believe that the soil value would be to the formation of real estate bubbles, which would have several positive effects. One effect would include the preservation of agricultural land by being more attractive for building in cities - currently a large amount of productive agricultural land has been lost in the construction of suburban houses. Another positive effect would include directing capital from real estate and more productive industries of the economy.

Opponents of taxation of land value believe that sufficient tax revenues cannot be increased by land tax itself without increasing the soil value to an unacceptably high rate. They claim that other forms of taxation must also be used, which fromDilutes the benefits of the soil value. If the soil value is imposed incorrectly, this could cause real estate values ​​to be immersed, which could damage the economy.

Many cities and countries have introduced a form of tax from the value of land. Harrisburg, Pennsylvania in the US helped to revive its central area through a modified tax value. The Australian city of Sydney also uses taxation of land value.