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Vermont Property Taxes:. Vermont Property Taxes. Property Taxes. Are actually 2 taxes: on land and on improvements. Provide a steady and reliable source of income. Account for 1/3 of VT’s state revenue. Can influence development patterns. Land Value Taxation:.
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Property Taxes • Are actually 2 taxes: on land and on improvements. • Provide a steady and reliable source of income. • Account for 1/3 of VT’s state revenue. • Can influence development patterns.
Land Value Taxation: • Shifts property tax liability from improvements to land. • Articulated by political economist Henry George (1879). • Equity, Efficiency, Environmental Protection.
Effects of Land Value Taxation: • Removes “market disincentive” for making improvements. • Reduces land speculation. • Reduces sprawl, encourages compact development. • Society benefits from societal value of land.
Applications of Land Value Taxation: • 700 cities worldwide use a graded property tax system • Denmark (1844) • Canada (1903) • South Africa (1914) • Pennsylvania (1913)
Land Value Taxation in Vermont? • Currently 2/3 of VT Property Tax Revenue comes from tax on the value of buildings. • Buildings assessed at $33.2 Billion • and Land assessed at $14.9 Billion. • LVT rate of 5% would generate the current level of revenue for the state.
Recommendations: • Apply LVT only in “growth centers.” • Reverse current ratio to generate 2/3 of state property tax revenue from taxes on land. • Work with established growth boundaries being developed by the Vermont Smart Growth Collaborative. • Revenue Neutral.
