Philly Realtors Call for Land Value Tax

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Josh Vincent points us to Sandy Smith at PhiladelphiaRealEstate.com:

Philly homeowners still nervously await the completion of the Actual Value Initiative property reassessment, worried that it might result in a hefty tax increase on their homes. And at least one elected official, rumored to be considering a run for mayor, has gone on the hustings to urge that it never be implemented now that implementation has been put on hold.

Instead of doing that, however, why not use the occasion to enact a tax reform that might spare many homeowners the nasty surprise they fear and stimulate redevelopment of Philadelphia real estate at the same time?

Now would be an ideal time to consider what Pittsburgh has had for a century and Harrisburg successfully implemented a decade ago: a property tax system that places the bulk of the burden on the land.

By taxing land more heavily than improvements, a “split-rate” property tax encourages land owners to put their land to work in order to pay the tax bill. Because the improvements are taxed lightly, such a system stimulates construction and development.

Those cities that have implemented such policies have seen building permits leap upward after they take effect, with positive effects on both municipal coffers and the urban fabric.

What’s more, it would help the city in its efforts to put its huge inventory of vacant land back to productive use.

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