author

Poul Schou

A natural experiment of changing land value taxation rates occurred in Denmark in 2007. Results suggest that raising tax rates on land does not get passed onto tenants, but instead, gets fully capitalized into land and property prices. Based on the results of a natural experiment in Denmark, land value taxation doesn't distort economic decisions because it doesn't distort the user cost of land. The burden of raising land tax rates falls on the owner at the time of the tax change. Future owners, although paying higher rates, are unaffected since they are fully compensated via a corresponding change in the land's acquisition price.
Land Taxes and Housing Prices
Land Value Tax
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