Greater City Providence

WPRI: Is it time for Providence to tax land rather than buildings?

The idea is to shift toward taxing the value of something whose supply won’t change due to tax rates – land – instead of the buildings and other improvements made there. The hope is that doing so would spur development, pushing those who own vacant land to do something with it.

Greater City Providence

Promoting the smart urban growth of the Greater Providence region.

3 comments

  • Interesting theory but here’s what would happen. They would have to make up for the loss of the value of the real property/building. So let’s do a theoretical:

    Suppose I live on a parcel where the land is valued at $30,000 and the home at $200,000. So $230,000 = 230 * 35 in Providence or $8,050 per year. You’d have to squash all that value into the land so that would drive up land prices.

  • The price of vacant land will be driven DOWN when owners facing a large new yearly expense and not willing to tackle development become highly motivated sellers.

    The point is that the tax bills for developed properties will remain the same or decline. The values of developed properties will remain a product of the same factors that govern them now.

    I generally love this idea. My only qualms are devilish details dealing like with certain underdeveloped properties, for instance nice old buildings that we do not want to see torn down and replaced with the maximum structure zoning will allow. Matters of grandfathering, exemptions for historic and other worthy purposes, and the politics of zoning changes will become even more contentious and fraught than they are now.

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