Incentive Taxation Newsletter

ISSN 0896-4556

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Center for the Study of  Economics
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Editor: Joshua Vincent
© 2002-2008

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^{Understanding LVT}

IT has taken on many new readers in the past few months, so it’s time to do our quick’n’dirty explanation of LVT. Land Value Taxation is a type of real property taxation. Whereas the typical real property tax taxes both land and the improvements on the land at the same rate, land value taxation taxes land at a higher rate while simultaneously reducing, or even eliminating, the tax on improvements.
For example, Clairton City and its school district in Allegheny County, Pennsylvania has a tax rate of 103 mills on land and 4.32 mills on buildings rather than 29.5 mills on both.
LVT has been shown to promote infill and new development where needed, and to reduce sprawl pressure where development is not wanted. LVT reduces tax burdens on productive property owners.

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