B.C. Land Tax Shift — A Better Way to Tax Property

By shrinking the tax burden on homes and business and shifting that onto land, B.C. could encourage more development, reduce blight, and leave most households better off, while putting our greatest asset — land — to work.

Key Takeaways

  • Replace major taxes: Our B.C. model shows that a Land Value Tax (LVT) capturing just 0.8% of land value could fully replace all major property-related taxes—eliminating municipal and provincial property taxes, property transfer taxes, and the speculation & vacancy tax (SVT).

  • More building, less blight: Shifting taxes off buildings and onto land value has been shown to lead to more construction, fewer vacant lots, increased business activity, fairer taxation, and tax relief for most households.

  • B.C. is uniquely ready: B.C. already assesses land and buildings separately and annually, has some of the highest land values in Canada, and faces a growing affordability crisis that LVT is designed to address.

Our B.C. Model: A Full Property Tax Shift

We’ve modelled a bold version of this policy where all taxes on buildings and improvements are eliminated, and replaced by a single Land Value Tax. A Land Value Tax capturing 0.8% of land value could generate approximately $12 billion in annual revenue, sufficient to replace:

  • Municipal property taxes

  • Provincial property taxes

  • Property Transfer Tax

  • Speculation & Vacancy Tax (SVT)

Due to data limitations across B.C. municipalities, we have not modelled partial exemptions or marginal shifts. Instead, this model demonstrates what is possible with a full transition to land-only property taxation.

Why B.C.?

British Columbia is uniquely positioned to benefit from a shift to land value taxation:

  • B.C.’s property assessment system was designed for this: B.C. is the only jurisdiction in Canada that independently and annually assesses the value of land separate from buildings, providing reliable data for LVT. In fact, B.C. Assessment may have been intentionally designed to eventually do land value tax.

  • Land dominates property value: In Metro Vancouver, where the housing affordability crisis is most acute, over 80% of property value is in the land alone, vs. an average for 60% across Canada.

Read More

How taxing land can fix the incentives plaguing our housing market

So long as land—what drives home values—is an investment, housing will be expensive. A land value tax would reduce demand for land as an investment, encourage more housing supply where needed, and help restore affordability for all.

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Report: $240B/year of economic rent from Canada’s land and natural resources

In this paper, we estimate the total economic rents (or unearned profits) from Canada’s land and natural resources that could be captured as new revenue, without inhibiting productive investment. A land value tax that captures 3/4 of the rental value of land could generate enough revenue to raise the 0% personal income tax bracket to $88,000/year.

Read the Report →