Yeah, that's unlikely. There are certain classes of renters it can't be passed on to during their rental term, but I'm guessing it can and likely would in general.
People can also sell their land/homes and move. It's less liquid than other assets, but less doesn't mean people won't sell/leave.
In Massachusetts it’s legal to pass on real property tax increases during the term of a residential lease, provided the lease contains specific clauses. (Most leases do, as a result.) And most commercial leases are triple-net, meaning the tenant is also on the hook for increases.
I would be surprised if most land consumption taxes (whether structured as property or land) would not get directly passed through to the beneficial consumers of that land quite quickly, or for their privilege to consume that land to be terminated/non-renewed at the expiration.
One of the benefits of a land value tax is that it has zero dead weight loss: because there's a fixed supply of land, the tax won't cause less of it to be around, and you don't lose out on the beneficial transactions that property tax can prevent.
There are several key benefits and I like the theoretical soundness.
My primary concern is that there are generally no market comparables for undeveloped land in developed areas.
If I believe it’s over-stated, I can appeal my property tax assessment by using comparables for nearby developed property. There is no equivalent market-based process for land values alone.
This is a reasonable and common concern, and one I shared until I looked into it in fine detail. Turns out it's far easier to estimate the value of land that things sit on than the entire property value, and most of the country actually operates on continually updated estimates of total property value rather than just land.
There's several anchoring sales nearby, you can regress out from all sales, etc. etc. And it's smoothly varying for nearby parcels, with very little change!
A much better explanation than what I can write can be found in the "Estimating" section here https://landeconomics.org/reports/california-billionaire-wea...
I will read that link later tonight (thanks!), but this still seems like a system where a particular property owner could be “targeted” (politically or economically) and suffer without reasonable legal recourse.
It's actually much harder to target a particular owner, because it's based only on land area, and the value of land in a general area! Property taxes are much much more susceptible to targeting as individual properties are much more variable and there's far more judgement about individual buildings and the potential value of a building.
Great! I’ll take all the oceanfront/riverfront land in an area and all the land immediately adjacent to major metro stops, please.
This highly local variation in land value does not seem to be adequately addressed n the California link above either (other than “The estimation runs at the level of each property category within each California county or census tract, using parcel-level data”, which does not seem fine-grained enough to cover waterfront property).
Surely the land value overlooking La Jolla or Malibu is worth far more than the lots just one block back. And those lots are likely to have more expensive improvements on them in any taxation system, but at least in a property taxation system there is a direct market reference to come back to rather than just an assessor’s judgment.
How much is the dirt at 28824 Cliffside Dr, Malibu worth? $5M? $25M? $50M? $75M? What does the census-tract level estimate come up with? How does that compare to 28867 Cliffside with an ever-so slightly larger lot, both in Census tract 8004.12?
In California some percentage of certain developments need to be rental controlled, so those are exempt from increases for those lower income folks, but I'm sure the difference would be spread out among everyone who isn't rent controlled.