The easier thing is just make is easier to build more housing, denser if needed, to fulfill demand.
As a concession the debt can be reassessed at any time during those 3 years. If there is a boom that makes the tax excessive followed by a bust that reduces the value of the land by 50% then your tax bill would also go down by 50%.
>The easier thing is just make is easier to build more housing, denser if needed, to fulfill demand.
That's the entire goal behind the land value tax.
This same type of thinking drives me crazy in CA where Prop 13 exists because someone might have to move because they’ve made a million dollars in house value (simply by existing) that they might have to realize.
1) The buyer is pricing the house at its worth minus its future tax liabilities (which is what the seller receives), and the seller will use that money to purchase another house which also has tax liabilities. That house has to be worse, or the tax liabilities lower (or in the same general tax area, both.)
2) The seller is in an appreciating asset, but can't choose when to sell. They must sell when the tax liabilities become too much[*]. Meaning they must regardless of whether the property will probably continue to appreciate. This is a wealthy buyer's advantage over the seller, although this is partially ameliorated by competition between wealthy buyers who have priced in likely appreciation. But a very wealthy buyer can create appreciation through buying nearby properties to control the area, and through lobbying.
3) Also, real estate tax law tends to benefit wealthy buyers who leave rental properties empty, and can use those liabilities to offset profits they make in another area.
This seems like a formula for downward mobility. And for people to be forced out of the neighborhoods where they have networks and jobs, and have to move to worse places where they have no networks, and are farther from jobs.
[*] In the worst case, they mortgage the home in order to pay the tax liabilities, and to extend the time before they must sell - meaning that when they sell, they're actually paying off back taxes with the money, meaning they have even less (or no) money for their next residence.
I admit I don’t have a lot of attachment to a given plot of land, and understand some people place more value on that. But it’s also pretty selfish for one person/family to claim a plot in a productive market to the exclusion of ten others by standing in the way of densification. It’s a question of singular good vs that of the collective, and there is no right answer there at which point I guess it’s agree to disagree?