Why Land Value Taxation (LVT)?
LVT is a flexible form of the real property tax. In Pennsylvania, land and building assessments are determined separately. That means we have an opportunity to see how much tax falls on each component of someone’s home or business. In Johnstown (with a rate of 36.44 mills), 22% of real property tax revenue comes from land. So what? That means that 78% of your revenue comes from buildings. In other words, if someone fixes up their house, their assessment goes up accordingly and their tax bill goes up accordingly. That’s a disincentive to go ahead with such a project. If buildings are taxed less, the city will have more and better buildings. When LVT is used and promoted by a city, individuals take the plunge and maintain their properties. In the City of Johnstown, CSE suggests that 66.5% of tax revenue come from buildings, 33.5% from land. That means adopting tax rates of 56.267 mills on land values and 30.974 mills on improvement values.
