B.C.'s Big Fix:
Land Value Tax
Solving our biggest challenges begins with the biggest asset in our economy: land.
Land value tax can help restore affordability and fairness — replacing anti-productive taxes on income and property, lowering housing costs, and better rewarding the workers and builders who power B.C.
At-a-Glance
We model 3 scenarios for a Land Value Tax (LVT) in British Columbia.
1) Replace Anti-Productive Taxes on Property: An LVT capturing 3.8% of land value could generate enough revenue to fully replace all major property-related taxes—eliminating municipal and provincial property taxes, property transfer taxes, and the speculation & vacancy tax (SVT).
2) Replace Income & Property: An LVT capturing 18% of land value could replace all provincial personal income and corporate taxes and all property taxes in B.C.
3) Annual Household Rebates: An LVT capturing 3.7% of land value could provide every B.C. household an annual rebate of $6,500, leaving nearly all households with more income.
B.C. Land Value Tax can Replace All Property Taxes
Note: Agricultural land exempted from LVT, applied on vacant, residential, and commercial land only. BC LVT revenues from 2022-23, municipal property taxes from 2022.
Introduction
Housing is expensive primarily because land is expensive. While homes deteriorate and depreciate over time, losing value; the land beneath them rises in value over time thanks to the work and investments of society around it. This is why property has generally been such a good investment and store of value – even if the house loses value, the publicly-financed land appreciation more than makes up for it.
When we talk about rising home prices in BC, what we're mostly talking about is the soaring value of land. For the average residential property in Canada, land accounts for nearly 60% of the property price, but in B.C.'s urban areas this is as high as 80%. Over the past 20 years, the combined value of all homes in Canada has doubled, while combined land values have nearly quadrupled. Taken together, these trends have inflated property prices far beyond income growth, leaving housing increasingly unaffordable and homeownership a distant prospect for too many British Columbians.
Land Value Tax (LVT) offers a fair and practical solution. LVT can shift the tax burden away from workers, builders, and businesses, and onto land value created by public investments and infrastructure. This could bring down prices and encourage more housing supply, while transforming the housing market from primarily serving investors to serving families and the broader community.