Didn't know that the Federal government has a land value tax?
You may be in for a pleasant surprise. UrbanTools has been following the happy saga of Federal land in National Forests rented for use by second-home owners. USA Today reports...
Little Bear Lake
As reported some time ago in Incentive Taxation, the Federal government has in the past few years decided to actually assess an annual rental value on land used by people who have built cabins and other holiday havens.
A little bit of land value tax
Have you ever heard of Big Bear Lake? Me either. Yet there's been a little bit of LVT going on there since the 1920s. Since the lake is in San Bernardino County, California we know that various districts and areas in the region had – at various points in history – been funded by a tax on land (or site) value. This program seems to be a little bit of the secret, but appears to be good policy and widespread on federally owned land[1].
This form of LVT is used by the National Park Service. Simply, “permitees” are allowed to build a cabin or house, with ownership of the land remaining in the hands of the Interior Department. What makes this program more interesting than usual is the fact that the land value is reassessed on a more or less regular basis[2]. Because some of the cabin owners are complaining about the land value increase, it seems as if someone at the National Park Service is performing due diligence.
We hope that the land value is reassessed more often. If values rise, that would result in higher land rent, reflecting the will of the market.
If, as many fear, demand will slacken because of a worsening economy and higher prices just to get to the site and to build on it, then land rent will decrease.
[1] http://www.nationalforesthomeowners.org/
[2] http://www.chrisatkinsre.com/myblog/2008/03/government-le-3.html?cid=108989318#comment-108989318
This week, in USA TODAY the those who have been paying a pittance for what they use (that the citizens of the USA own) are complaining big time. Luckily, Jay Butler of the Arizona State Carey School of Business asks the million dollar rhetorical question: "It doesn't benefit me that you have this cabin, so why should the federal government subsidize your recreation?"
