Paving the Way Towards Predistribution: Introducing a Land Value Tax in Bizkaia (Olea, Hoyos & García Enríquez, 2025)

Summary

"Paving the way towards predistribution: a study on the introduction of a land value tax," by Jesús Olea, David Hoyos, and Javier García Enríquez (University of the Basque Country), appeared in The Annals of Regional Science, published online 17 February 2025. The paper simulates introducing a land value tax in Bizkaia, a Spanish province with fiscal autonomy (part of the Basque Country's distinctive tax-collection arrangement within Spain), designed to displace Bizkaia's existing real-estate taxes and partially displace income tax — framed explicitly as a step toward predistribution (structuring the economy so pre-tax income and wealth are fairer to begin with) rather than mere redistribution (taxing and transferring after the fact).

Methodology and Headline Result

The authors build a spatially-correlated hedonic price model to estimate Bizkaia's land value tax base parcel by parcel — the same general family of technique the wiki's mass appraisal methods page documents as the practical answer to the "land value can't be assessed" objection. Following the methodology of Lyons (2012), they set the revenue target as the sum of (a) Bizkaia's existing real-estate tax revenue and (b) the income-tax liability of roughly the bottom 75% of the population by taxable base — i.e., the tax shift aims to let ordinary and lower-income residents keep more of their labor and capital income, funded instead by a levy on land value. Computing the average tax required per square metre of land value to hit that combined target, they find a proportional rate of 1.05% on land value would be sufficient.

Relation to the Georgist Case

This is a rigorous, jurisdiction-specific quantification of exactly the shift Georgists argue for: replacing taxes on income and improvements with a tax on land value, at a concretely computed rate for a real (if unusually fiscally autonomous) jurisdiction. It belongs in the same genre as the wiki's other parcel-level LVT simulation studies, and adds Spain's first entry to that comparative set — a useful additional data point for the revenue-sufficiency debate the wiki documents on LVT doesn't raise enough revenue, since a fully-worked, jurisdiction-specific simulation carries more weight than a national back-of-envelope estimate. The "predistribution" framing is also conceptually useful: it reframes LVT not as a redistributive intervention layered onto an otherwise-unchanged economy, but as changing the structure by which pre-tax income and land-based wealth accrue in the first place — language that may travel better in policy debates wary of "redistribution" as a loaded term.

Nuances and Limits

• Bizkaia is fiscally unusual. The Basque Country's concierto económico gives its three historical territories (of which Bizkaia is one) their own tax-collection authority within Spain, a degree of fiscal autonomy most regions and provinces do not have — the simulation's feasibility rests partly on an institutional arrangement that would need separate authorization to replicate elsewhere in Spain or beyond.
• A simulation, not an implemented policy. As of this paper, Bizkaia has not actually introduced this land value tax; the 1.05% figure is a modeled requirement, not an observed yield.
• Full text not independently verified beyond the abstract. Specific details of the hedonic model's parcel-level assumptions, the exact income-tax-liability threshold used, and any sensitivity analysis are not covered by this page (B-claim).

Bears On

• Objection: LVT Doesn't Raise Enough Revenue — a rigorous, jurisdiction-specific worked answer (1.05% suffices to displace real-estate tax plus lower-income-tax burden) rather than a national back-of-envelope estimate.
• Concept: Mass Appraisal Methods — the hedonic spatial modeling technique this simulation applies.

See Also

• Land Value Tax
• Mass Appraisal Methods
• Objection: LVT Doesn't Raise Enough Revenue
• Blanco, Bauluz & Martínez-Toledano: A Century of Spanish Wealth — a different Spain research page (national wealth-composition data, not an LVT simulation)

Sources

1. Jesús Olea, David Hoyos & Javier García Enríquez (2025), "Paving the way towards predistribution: a study on the introduction of a land value tax," The Annals of Regional Science, published online 17 February 2025, DOI 10.1007/s00168-024-01353-3. doi.org — fetched and read (abstract level) 2026-08-26; used for the Bizkaia jurisdiction, the spatially-correlated hedonic modeling method, the Lyons (2012) revenue-target methodology, the bottom-75%-income-tax displacement target, and the 1.05% land-value tax rate finding (B-claim).