Unfortunately the examples given are not examples of successful, sustained LVT reforms being introduced by their nation’s government.

Singapore, Taiwan and Hong Kong had their systems imposed from outside. The Danish system seemed to be so successful that plans were scrapped – they now have hefty Income Tax and VAT, and a highly controlled property market. Estonia’s system was very limited in scope and scale, and the nation never recovered its GDP of communist times. It has been “taken out” by the international financial capitalists, and its prospects are bleak.

Singapore’s system taxes buildings and land improvements equally to the land itself, at a rate of 0.5% of property values for non-residential properties. Singapore has just (Jan 2011) abolished its property tax for home owners of homes under $$6m (US$4.7m), and the rate is only 0.2% up to $$29.5m (US$23m).

The Singapore experience is interesting, but it is not Land Value Tax, and abolishing it for home owners confirms that property taxes are not politically stable. Singapore has VAT (GST), Income Taxes, Stamp Duty, and all the tax paraphernalia of “modern” bureaucratic production tax systems.

Hong Kong’s system is market-based using government leases, not tax-based. While not perfect, it confirms that the economic rent of land can be collected successfully without Land Value Taxation.

Denmark’s experience shows how powerful and fast-acting the economic effects of LVT are. But also confirmed that LVT is politically not stable as opposition swiftly shut down government ambitions for the system.

Perhaps Taiwan is the best example of LVT success in action, and that was imposed on the nation’s constitution from outside as the article points out.

One key insight is that the economic rent of land is now collected by the banks which exchange financial bookkeeping entries for the economic flow from property owners. This must be recognised as at the core of any credible LVT proposals.

Summary: There are no successful examples of LVT being introduced by a national government. Where LVT has been used, pressures to abolish or stunt it are irresistible. Local governments habitually shrink, distort or abolish LVT under political pressure. The good news is that market-based methods of collecting land rent (such as in Hong Kong) are economically efficient and politically stable. One way of achieving this is through Location Value Covenants (LVCs) advocated by the Systemic Fiscal Reform Group (SFR Group
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