DALT: Depreciation-Assisted Land Value Tax

Definition

DALT ("Depreciation-Assisted Land value Tax") is a property-tax design proposed by Lars Doucet of the Center for Land Economics in a July 2026 Progress and Poverty piece.[1] It keeps a conventional, unified property tax — one rate on total assessed value, land plus improvements — but fully exempts the improvement value of new construction for the first half of the building's expected useful lifetime (e.g. the first 10 years of a building expected to last 20). Doucet frames this as one entry in a family of practical, incremental "Land Value Return" policies that also includes split-rate taxation, universal building exemptions, public land leases, and localized land-value-capture zones.[1]

Mechanism

The design leans on two facts about building depreciation, per Doucet's model:[1]

• Depreciation is front-loaded. Real-world buildings lose most of their economic value earlier in their lifetime than a straight-line schedule implies (Doucet models this against a "twenty-year depreciation cycle" in which "by year 10 nearly all the building's value is gone, and land carries most of the tax burden").
• Present value makes early-year taxes matter most. Because taxes paid soon after construction have the largest effect on the investment decision, exempting improvement value precisely when it is largest and soonest does most of the work a full land/building split would do. In Doucet's worked example (a $100K lot, $200K of building capital, 2% property tax rate, 5% discount rate), a 10-year new-construction abatement cuts the present value of building-related tax by roughly 97% under a fast (twenty-year) depreciation schedule, and by about 81% even under a more conservative depreciation assumption.[1]

The result, in Doucet's charts, is that a DALT-adjusted property tax tracks a pure land value tax far more closely than an unmodified property tax does — without ever requiring the assessor to separately value the land underneath an existing, already-built parcel.

Historical Precedent

Doucet credits New York City's 1920s temporary property-tax exemption on new-construction improvement value — covered in depth on the wiki's own NYC 1920s tax exemption research page — as the historical inspiration, citing a Citizens Housing & Planning Council retrospective that ties the exemption to the era's building boom.[2] DALT is presented as Doucet's own formalization and naming of that older tool, not a rediscovery of an existing academic proposal — the piece does not cite prior economics literature proposing a depreciation-schedule abatement as an LVT proxy specifically. [VERIFY: no antecedent academic source for this exact mechanism was found in a search beyond the NYC 1920s policy episode and Doucet's own piece — treat DALT as newly named/formalized in 2026 pending independent citation.]

What Problem It Solves

DALT is aimed less at land/building assessment difficulty (the standard objection) than at legal and political barriers to enacting a pure LVT: many US states and cities have constitutional or statutory limits on taxing land differently from buildings. Because DALT keeps a single, uniform property-tax rate and only adds a time-limited exemption on new construction, Doucet argues it can be layered onto existing property-tax law — he points to Texas's Chapter 312 tax-abatement-district statute as a possible existing legal vehicle.[1]

It also lowers, rather than eliminates, the assessment burden that the land-cannot-be-assessed objection and mass appraisal methods page both discuss: DALT requires estimating only the improvement value of new construction (something Doucet says many assessors already do, and the newest, best-documented building stock is also the easiest to value), rather than performing a land/building split across an entire parcel roll.[1]

Limits and Caveats

• Works best where buildings depreciate rapidly — Doucet names Japan, disaster-prone areas with frequently updated building codes, and other rapidly-rebuilding markets as ideal cases; the approximation to a pure LVT is weaker wherever construction is long-lived.[1]
• Distorts toward demolition and under-durability in slow-depreciation markets. Because the exemption expires at a fixed point, it creates a marginal incentive to keep improvement value inside the abatement window — encouraging teardown/rebuild cycles and discouraging investment in durable, long-lived construction, an effect a pure LVT does not share.[1]
• Single, untested, non-empirical proposal. As of this writing DALT has no known real-world implementation or independent academic review; the case for it is a theoretical/design argument (Type C/D claim), not an empirical finding. [VERIFY: no independent economic modelling or evaluation of DALT located as of 2026-07-30.]

See Also

• Split-Rate Taxation — the more established practical alternative to pure LVT that DALT is explicitly positioned alongside
• Objection: Land value can't be assessed accurately — the assessment-separation problem DALT sidesteps rather than solves
• Mass Appraisal Methods — the CAMA/hedonic/residual toolkit DALT reduces the need for, by only requiring new-construction valuation
• Land Value Tax — the pure policy DALT approximates
• NYC 1920s Tax Exemption — the wiki's research page on the historical precedent DALT formalizes
• Doucet, Does Georgism Work? — Doucet's earlier wiki-covered work on the related land/building assessment question

Sources

1. Lars Doucet (2026), "DALT: Depreciation-Assisted Land Value Tax," Progress and Poverty (Substack, Center for Land Economics), July 29, 2026. Article — primary source for the mechanism, the present-value math example, the Texas Chapter 312 legal-vehicle point, and all limits/caveats (C/D-claims; Doucet's own proposal).
2. Citizens Housing & Planning Council, How Tax Exemption Broke the Housing Deadlock in New York City (1960 retrospective study of the 1920s NYC new-construction tax exemption). PDF · CHPC page — used for the historical-precedent claim (A-claim); cited by Doucet as the source of his NYC chart.