Why we need a green land value tax and how to design it

A green land value tax can resolve conflicts between meeting climate goals, and equity and housing affordability, reducing intergenerational injustice. Land prices, reflected in house prices, relative to incomes are near all-time records, pricing younger citizens out of home-ownership and affordable rents. The OECD confirms that annual property taxes linked to recent market values improve macroeconomic stability and long run rates of growth. The green LVT – effectively a split-rate property tax- would consist of a charge on the land plus a charge on the building minus a discount depending on its energy usage. Regular revaluations discourage speculation and avoid cliff-edge changes. To protect cash-poor but land-rich households, everyone would have the right to defer the tax. To avoid complex interest charges, the tax authority would register a proportionate claim at the Land Registry equal to the unpaid tax for each year deferred, settled on the property’s transfer or sale.