Many counties have a real property tax that is imposed on the ownership of real estate located within its boundaries. Real Property tax is typically imposed upon the assessed value of the real property – typically set as a percentage of the most recent purchase price paid for a parcel of real property.
In addition, many counties impose a one time tax or fee whenever a parcel of real property is transferred. Real property taxes are imposed and collected at the local level.
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The smart counties and towns are the ones who have recognized that the property tax is really several taxes rolled into one, and have separated the good parts from the bad parts.
The bad part is the part that falls on buildings and equipment. We ought not to be taxing these things at all; to do so discourages the creation of buildings and the purchase and use of equipment.
The good part of the property tax is the part that falls on the value of the land itself. Taxing land value has no negative effects. Taxing land value, even heavily, leads to better land use. Well-located sites get put to good use, with prompt redevelopment by motivated owners, or prompt resale at affordable prices to buyers who can then afford to put a suitable building on the site.
And it inhibits sprawl, because the prime urban sites, served by streets, highways, rail, buses, whatever, get used first: their owners simply can’t afford to keep them underused. This prevents premature development at the fringe, so the farmland remains farmland; the residential ring doesn’t need to expand into it, and some neighborhoods, well served by infrastructure, get redeveloped into denser housing, if that is what’s needed.
Not a single acre leaves town during the night. Not a single square foot can be hidden. Not a single tax dollars falls into the pockets of a middleman. (Ah! There’s the problem! It is efficient! It can’t be evaded! It is cheap to collect!)
We’d all live better if we adopted Land Value Taxation as our primary revenue source. You can learn more about this at http://www.answersanswers.com, wealthandwant.com and lvtfan.typepad.com