Land tax is a tax levied by a government on the unimproved value of land. It is generally assessed on the owner of the land, although in some cases it may be levied on the tenant instead. The purpose of land tax is to generate revenue for the government, and it is generally considered to be a more equitable form of taxation than other sources such as income or sales tax.
Land tax is assessed on real estate by both corporations and natural persons. It is a tax on all parcels that belong to the same registered owner, which can be a person, trust, or corporation. This owner must be listed on the Certificate of Title. There are some exceptions to this general rule. See Other Ownerships for more information. Here is an overview of the process. Listed below are some of the main points to know about land tax:
Exemptions from paying land tax
Exemptions from paying land tax may be claimed when a property is the principal place of residence. The principal residence concession applies to one property, so a married couple cannot claim separate properties. Separate main residences are also not applicable to children under the age of 18.
The residential exemption may be combined with other exemptions. To qualify for this exemption, a property must have a taxable value of at least 10 percent below the assessed value. Certain financial hardships and physical disabilities are also eligible. Another exemption may apply to shares in housing cooperatives. Housing cooperatives must file the application for each shareholder, which does not apply to individual shareholders. This exemption does not apply to land that is used solely for commercial purposes, such as a store or office.
In addition to residential exemptions, there are other exemptions from paying land tax. An agricultural property, which is not the principal place of residence, does not pay land tax. The appellant, whose sole member is not a member of the Land Tax Division, has invested more than N$7 million in improvements and has paid the assessed land tax since 2001 until 2013. This change in attitude is unclear and explains why the appellant filed applications to delay the implementation of land tax.
Calculation of land tax
When you are calculating land tax, you should first learn more about the cadastral value of your property. This is a highly variable factor in the calculation of land tax and has caused a great deal of controversy. Many land owners consider this value to be too high and complain that it leads to an increase in the amount of tax they have to pay. To address this problem, many of them have taken their properties to court.
The cadastral value of a plot of land is the basis for land tax calculation. However, there are some exceptions. Some lands may not be subject to payment because they are owned by enterprises, or because they have a value to the city. The state determines the cadastral value of a plot of land on January 1 of the year you pay the tax. When you are paying land tax for the first time, a settlement is conducted from the estimated value.
The taxable value of a cadastral unit is calculated using a progressive rate structure. The rate scales are: general land tax and trust land tax. In general, the site values of taxable land are combined to calculate the total taxable value. This value is then allocated to each taxable parcel. In case of a trust, the cadastral unit will be assigned a trustee. Any land that is exempt from taxation is not considered to be taxable.
Impact of land tax on housing supply
A land value tax is an important tool for encouraging future development, but it only works if there is space for development. Land use regulations, for example, are often quite restrictive, which results in higher taxes for residents, but lower effective taxes that encourage densification. Such regulations are also detrimental to housing supply in some communities, as they limit development in both residential and commercial zones. However, a land value tax is important in the context of a city’s Comprehensive Plan update, which Mayor Bowser has recently ordered.
Changing the tax system could help address the housing crisis. Many local tax regimes penalize developers who invest in property improvements. People who add rooms, an office, or a third floor to their home will face a higher tax bill than those who don’t add housing options. But by increasing the tax rate on land values, communities may see more housing supply. If the tax is designed to increase the number of affordable units, the system could help the local economy in many ways.
While land value tax benefits property owners, it would largely affect the price of vacant land. Landowners capture the majority of land value before the government makes improvements, and subsequent home owners pay for these benefits through higher prices. But if the land value tax is designed to reduce the value of land, it could reduce the circulating bank credit. By increasing the value of built space, the costs of improving land will decrease. This in turn would encourage the development of more affordable housing. It would also encourage the infilling of underutilized urban space.
In conclusion, land tax is an important tool that can be used to help fund public goods and services. It is a fair and efficient way to raise revenue, and it can help to reduce inequality. I urge you to learn more about land tax and how it could benefit your community.