Josh Vincent ran the numbers using Philly’s new AVI data, and the land value tax comes out looking like an excellent tax relief option:
The following table demonstrates what would happen to all taxable parcels if, instead of a flat tax of 1.25%, the City shifted at least some tax burden from buildings to land values:
The new assessments may still be subject to revision, but the overall impact is clear. Shifting the property tax burden off of buildings and onto land would mean tax cuts for large majorities of residential, mixed-use, and multi-family properties.
This accomplishes all the things City Council members say they want to do and more.
It is a slight tax shift onto commercial properties, which everybody seems to want, and which is cleaner and less kludgy than Maria Quiñones-Sanchez’s plan to raise the Use & Occupancy Tax while arbitrarily exempting the first $2000.
It also helps spare a huge number of renters who reside in multi-family and mixed-use buildings. Many renters could be in for quite a hit next year under AVI, but so far nobody on City Council has a plan to do anything about it.
Crucially, unlike some of the other ideas being circulated it would not require the city to raise the millage rate on property to pay for tax relief. This should satisfy Bill Green’s concerns about the impact of a millage rate increase on new construction.
Combined with Kenyatta Johnson’s property tax deferral plan, the land value tax could ably serve as the tax relief plan. It’s right on the policy, and right on the politics. Many more voters would see their taxes drop than increase.