Sustainable Urban Development and Land Value Taxation: The Case of Estonia
Compares Tallinn (pure land value tax since 1993) with Riga, finding higher inner-city density and construction under the land-only tax.
Summary
This 2016 Land Use Policy paper by Aivar Tomson provides rare cross-border empirical evidence on a national land value tax, comparing Tallinn, Estonia — which has taxed land only (no tax on buildings) since 1993 — with Riga, Latvia, a similar Baltic capital without a pure land tax.
Key Finding
Tomson finds higher inner-city density and more construction in Tallinn than in comparable Riga, consistent with the prediction that taxing land (not improvements) encourages efficient, dense development of valuable central locations. As with most natural comparisons, other differences between the cities mean the result is suggestive rather than definitive.
Bears On
- Place: Estonia
- Outcome: Split-rate taxation increases construction
Sources
- Aivar Tomson (2016), "Sustainable Urban Development and Land Value Taxation: The Case of Estonia," Land Use Policy. Publisher