B.C. Land Tax Shift — A Better Way to Tax Property
By shrinking the tax burden on homes and business and shifting that onto land, B.C. could encourage more development, reduce blight, and leave most households better off, while putting our greatest asset — land — to work.
Key Takeaways
Replace major taxes: Our B.C. model shows that a Land Value Tax (LVT) capturing just 0.8% of land value could fully replace all major property-related taxes—eliminating municipal and provincial property taxes, property transfer taxes, and the speculation & vacancy tax (SVT).
More building, less blight: Shifting taxes off buildings and onto land value has been shown to lead to more construction, fewer vacant lots, increased business activity, fairer taxation, and tax relief for most households.
B.C. is uniquely ready: B.C. already assesses land and buildings separately and annually, has some of the highest land values in Canada, and faces a growing affordability crisis that LVT is designed to address.
Replacing Property Tax with Something Better
A Land Value Tax (LVT) is a tax on the unimproved value of land—not the buildings, homes, or improvements constructed on it. Unlike traditional property taxes that penalize people for developing land, LVT targets only the location value—value created by public investment, infrastructure, and the broader community, not by individual effort.
LVT is often proposed as part of a tax shift—replacing existing taxes that discourage productivity, investment and development. The most common application is to shift property taxation off of buildings and improvements, and onto land value alone.
This approach is commonly described using various terms:
Split-rate property tax: A system where land is taxed at a higher rate than buildings. (Lincoln Institute)
Building exemption: A full or partial exemption of improvements from property taxation. (Governor of Colorado)
Universal property tax abatement: A policy that reduces the tax rate applied to all privately-created building values. (Strong Towns)
These all describe variations of the same basic idea: Shift taxes off what people build, and onto what makes land valuable in the first place—location, infrastructure, and value generated by the community around it.
Simplified visualization of Property Tax vs. LVT
Our B.C. Model: A Full Property Tax Shift
We’ve modelled a bold version of this policy where all taxes on buildings and improvements are eliminated, and replaced by a single Land Value Tax. A Land Value Tax capturing 0.8% of land value could generate approximately $12 billion in annual revenue, sufficient to replace:
Municipal property taxes
Provincial property taxes
Property Transfer Tax
Speculation & Vacancy Tax (SVT)
Due to data limitations across B.C. municipalities, we have not modelled partial exemptions or marginal shifts. Instead, this model demonstrates what is possible with a full transition to land-only property taxation.
Evidence on Land Value Tax
Pennsylvania
Harrisburg, PA adopted a split-rate tax in 1982, taxing land at four times the rate of buildings:
Vacant buildings declined by 90%
The number of businesses increased by 360%
90% of property owners paid less in taxes
Allentown, PA adopted a similar system in 1996, taxing land at five times the building rate:
Construction and renovation increased by 32% (1.8× higher than a comparable city)
70% of households saw tax reductions
In at-risk neighbourhoods, that rose to 90%
Detroit
The Lincoln Institute of Land Policy estimated that an LVT property tax shift proposed in Detroit could:
Provide tax relief for 97% of residents and 70% of small businesses
Reduce tax delinquencies, foreclosures, and speculation
Spur inclusive economic development, support homeownership and promote neighbourhood revitalization.
These examples show that removing taxes on buildings can reduce barriers to housing supply, support local economic growth, and deliver more equitable tax outcomes.
Why B.C.?
British Columbia is uniquely positioned to benefit from a shift to land value taxation:
B.C.’s property assessment system was designed for this: B.C. is the only jurisdiction in Canada that independentally and annually assesses the value of land separate from buildings, providing reliable data for LVT. In fact, B.C. Assessment may have been intentionally designed to eventually do land value tax.
Land dominates property value: In Metro Vancouver, where the housing affordability crisis is most acute, over 80% of property value is in the land alone, vs. an average for 60% across Canada.
A New Model for Fairness, Affordability, and Growth
This tax shift would reward those who build homes and contribute to the economy—not just those who hold land and wait for it to appreciate. It’s a simple idea with big benefits. Fairer taxation, more housing, and no new taxes—just better ones.
Our model shows that British Columbia can do this today—and by showing what’s possible, we hope other provinces will be inspired to follow.
Read more about what an LVT could do for the province in B.C. Land Value Tax: Putting our greatest asset to work: 1) replace anti-productive income and property taxes, or 2) pay annual household dividends of $6,500.
Looking for a deeper dive into this topic? Read the Case for LVT here.
Banner image from Mike Stewart Personal Real Estate Corporation.
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So long as land—what drives home values—is an investment, housing will be expensive. A land value tax would reduce demand for land as an investment, encourage more housing supply where needed, and help restore affordability for all.
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Report: $240B/year of economic rent from Canada’s land and natural resources
In this paper, we estimate the total economic rents (or unearned profits) from Canada’s land and natural resources that could be captured as new revenue, without inhibiting productive investment. A land value tax that captures 3/4 of the rental value of land could generate enough revenue to raise the 0% personal income tax bracket to $88,000/year.