What don’t we know about LVT? Research that could advance Georgism.

Reviewing the current state of research into land value taxes & cultivating future research

Every now and then, students or researchers reach out to us to ask how they can best deploy their skills to advance LVT advocacy. While there is research literature on land value taxes and Georgism, the field feels still relatively unexplored by academia.

We are eager to cultivate more research into some of the key questions confronting LVT supporters and advocates here in 2025. To that end, this article explores the research questions that we think present the most-urgent challenge for Georgists. We have plenty more ideas, but this focuses primarily on research that we believe is studyable today.

We also recognize that plenty of great research has already been done. Steve has a great literature review document. Some of our questions may be duplicative of current research, but we believe that building on the current evidence and research particular in new settings or with modern methods can offer a benefit to the research literature.

Are you a student or academic interested in researching LVT? Please reach out to us by filling out this form (make sure to mention your relevant skills/research interests). We maintain a record of LVT-curious researchers, and can connect you with like-minded folks. If your research requires funding, we may be able to inform you about potential sources of support.

To begin, we start with potential settings to study the real-world effects of LVT implementation.

Settings for Studying the Impacts of LVT

Unfortunately, there have been relatively few real-world implementations of LVT, which somewhat limits the availability of data that could be used for further research. In this section, we highlight some of the settings that we believe could prove useful:

• Pennsylvania: Re-visiting the effects of the LVT shifts in PA

  • LVT was implemented in 20 municipalities and taxing districts throughout PA over the past century. These have been used as the setting for around 10 empirical studies of the effects of an LVT shift, which are summarized here. Further research could build on the data and methods used by these papers, and examine a wider range of outcomes.

  • Several of those existing studies focus on Pittsburgh. Subsequent research could explore the impacts of LVT in other towns like Harrisburg and Altoona.

  • What happened in the 5 years Altoona passed a high LVT from 2011-2016? Were there any noticeable changes in market outcomes during that time?

• Estonia: There has been relatively little empirical research into Estonia’s land tax. They struggled with land valuation and recently in 2024 re-valued land. There is potential to study implicit higher and lower land value taxes based on assessment in-accuracy. There is also potential to study across cities in Estonia where different rates apply. In 2024, Estonia limited the maximum land rate that could be administered, another event that could be exploited for an economic study.

• Denmark: Høj, Jørgensen & Schou (2018) changes to municipal boundaries in 2007 present an opportunity to identify quasi-random variation in rates of land tax before and after the restructuring. Similar methods could be used to examine a wider range of outcomes.

• Australia:

  • Australia has a history of land value taxation, including at the federal level. Now, states run taxation. Victoria appears to have the strongest of land value taxation, and in 2024 significantly expanded the land tax, including through decreasing the tax-free threshold. Australia in general provides a good setting to study land value tax, across jurisdictions and policy changes. Victoria’s history in particular seems to be useful in this context.

  • What have been the impacts of Victoria, Australia's expanded land taxes and vacancy taxes?

• Hawaii’s Anti-LVT: To what extent have Hawaii’s split-rate taxes discouraged development?

  • Two Hawaii counties have inverse-LVT with higher building taxes than land taxes. Economic research can parse out the impacts of this policy and the ways it may be discouraging development (which is the intent of the policy). What are the effects of using inverse-LVT to discourage development?

• New Zealand: Most local governments were funded by a pure LVT in the early 20th Century, and have gradually shifted towards a traditional property tax over time (8 of NZ’s 27 local governments were still using LVT as of 2022). These differences in tax base over time and space could provide a useful setting for empirical analysis. In addition, Gemmell, Grimes & Skidmore (2019) use the amalgamation of several municipalities into a unitary Auckland Council as a natural experiment for analyzing the change from LVT to property tax.

• Saudi Arabia, British-Colombia, Etc.

  • Vacant land taxes have increased in popularity over the past few years and have existed far longer. They both can possibly be exploited in some way to study the impacts of a broader land value tax or can be studied independently in their ability to encourage development. Vacant land taxes may also be studied to find the extent the impacts are muted by subsequent decreases in the value of vacant land (thereby increasing tax burden on improved land). There is a larger question for Georgists here: to what extent should we support vacant land taxes?

Research on the Economic Impact of LVT

We typically refer to two main sources of research into the empirical effects of LVT. Several peer-reviewed research papers analyse outcomes from the implementation of LVT in various Pennsylvanian municipalities over the past century, which Steve summarizes here. And this recent paper by Murphy & Seegert uses a clever method to analyze implicit differences in land taxes across 2000 counties across the US. These settings and/or the settings above may provide a foundation to study the following questions.

• On housing outcomes: What impact does LVT have on the type and quantity of housing that gets built? Does an LVT raise, lower, or have no effect on the long-term pathway of rents?

• On land prices: What is the net effect of an LVT shift on land selling prices?

• On urban form: What impact does LVT have on density and urban sprawl?

• Inequality: What impact does an LVT shift have on income & wealth inequality?

• On vacancy: What impact does LVT have on land & housing vacancy rates?

• On displacement: What impact would a LVT have on displacement of low-income or retired households & gentrification?

  • In progressive circles, the concept of displacement is frequently raised, particularly in discussions about how LVT incentivizes development. Research into this area could examine and potentially reframe displacement, focusing on rising land values as a root cause. This pressure often arises when areas close to amenity-rich locations are not fully developed.

• On Capitalization: How do land value taxes impact land-price-to-rent ratios?

  • Currently, several Pennsylvania jurisdictions have land value taxes, and little to no research has been done on how that currently affects their economies. However, in theory, land value taxes decrease land prices proportionally. Therefore, we would expect these cities to have lower land-to-rent ratios than similar cities. If this is true, the impact of a land value tax may be muted. The more the tax is increased, the less the land is worth; therefore, the city will not actually collect more revenue.

Research to Support LVT Advocacy

Our experience when making the case for LVT to policymakers and communities is that it is usually pretty easy to get people excited about the results discussed in the previous section. A tax system which rewards hard work, builds housing and boosts growth? Sounds great! But when the conversation turns to the hard questions of how to actually implement such a policy, we are often disappointed to see their enthusiasm rapidly deflate. This section highlights some of the research questions that are vital to help keep the dream alive.

Assessment of land values is a perennial thorn in our side. Even the most efficiency-obsessed economists can sometimes be heard singing the praises of LVT in theory, but lamenting that “sadly it’s impossible to accurately assess land values”. Lars and Greg will have a full piece written on this question shortly. The core research question is how can we accurately assess the value of land for vacant and improved parcels in a defensible way.

• Can land be accurately valued?

  • This is the central question that will propel the movement forward. To prove that land can be accurately valued using assessments, research would utilize property tax data to demonstrate reliable approaches to land valuation. There is room for creativity on other benchmarks and tests someone may use to prove lands value.

• What market mechanisms could be used to accurately value land values?

  • Greg is particularly interested in proposals that are both feasible and have some reasonable way to truly differentiate land from improvements without falling into the hold-up problem or relying on any complicated insurance schemes (which would ultimately rely on machine learning models to value land and improvements separately).

  • Some examples of people thinking about mechanisms that could solve this problem are Mihali Felipe here and Sam Harsiomony here.

Another hurdle which can kneecap LVT advocacy is legality. An LVT at the Federal level is unfortunately unconstitutional, which is why most of our advocacy takes place at the state and local level. Sadly, some state constitutions also contain barriers to an LVT, typically through a uniformity clause requiring that all real property be taxed the same. However, whether such a clause truly means that both land and buildings must be taxed at the same rate can depend on factors such as the rigidity of the clause, how classes of property are defined, the ability to design exemptions, and legal precedent specific to each state’s courts. Greg previously wrote on how these clauses may not preclude LVT. There is therefore a need for a thorough analysis of the legality of LVT within each state, either through targeted analysis within states where LVT advocacy is taking place, or ideally as a comprehensive review of all 50 state constitutions and their precedent in the state courts.

We also often hear queries relating to progressivity, typically expressed through concerns about the impact of an LVT on tenants, low-income homeowners (especially those in gentrifying neighborhoods), and retired widows living in their family home.

• Does LVT get passed into higher rents? In this research brief, Steve explains that economic theory and evidence both suggest that LVT comes out of the pockets of landowners and does not raise rents. However, there are only two empirical studies on this topic; LVT advocacy would be bolstered by further research on this question.

• Does converting property taxes into an LVT shift the tax burden towards or away from wealthier neighborhoods? The answer to this question can vary wildly depending on each city’s historic development patterns. It is therefore one of the main analyses that we conduct on behalf of specific cities, such as for South Bend here and Richmond VA here. If you’re interested in replicating this for your own city, you can find some helpful instructions here (or contact either of us and we’ll be happy to help!).

• Is LVT progressive with respect to income & wealth? We actually know surprisingly-little about the distribution of land ownership across the socioeconomic spectrum. For example, while the wealthiest 10% of households own 44% of America’s real estate, they also own $40 trillion in shares & equities, much of which is likely to also be tied to real estate holdings. Further research should isolate the presence of land in both property and equity holdings and trace the flow of land rents within household incomes & expenses.

Relatedly, there is a need for further work on policy design which seeks ways to transition towards LVT in ways which maximize political viability. In our advocacy work we often encounter a strong bias towards maintaining the status quo, typically arising out of concerns about progressivity, a reflexive dislike for property taxes in general, or the backlash from those who would face higher taxes under an LVT. Analysis in this vein would likely focus on the distributional effects of various policies, ideally using data on individuals or households (such as PUMS). Policy designs to consider could include:

• Universal Building Exemption: Property taxes continue to function as-is, but with the creation of a new ‘universal building exemption’ whereby any amount of money spent on renovating or redeveloping a property generates a tax exemption which gradually expires over time.

• Progressive LVT: An shift which is designed to maximize productivity by, for example, exempting a fixed amount of land value from taxation.

• Universal Land Dividend: whereby LVT revenues are used to fund a Universal Basic Income (UBI). This approach is explained here, including example results from Canada, the UK and New Zealand.

Next Steps

• Fill out this form if you are interested in furthering LVT research (make sure to let us know your research interests and relevant skills)

• Check out our LVT research agenda, which is intended to serve as a more comprehensive living record of research relevant to LVT advocacy.

• If you are a student or researcher interested in advancing Georgist ideas, check out the Progress & Poverty Institute’s scholarship and grant programs.

• Please get in touch with us at greg@landeconomics.org and shoskins@progressandpovertyinstitute.org if any of the following apply:

  • If you are aware of published studies that are missing from the LVT literature review and which you believe could help to fill some of the gaps identified above

  • If you are connected to, or know of, potential sources of funding for the types of research explored in this article.