Wednesday, March 15, 2017

OUR OPINION: Time To Move On A Vacant Property Tax

The members of the Dorchester Village Board read this website, so we'll go ahead and ask the question: Is it time for the village to impose a land value tax on vacant properties in town?

Last week, we stumbled across a story that tells of several U.S. cities calling for a “land value tax” as a way to improve downtrodden areas.  

The tax -- which imposes higher levies on vacant property, thereby increasing the owner’s costs of holding on to unused, distressed property -- is being heralded as a way to eliminate blight and drive redevelopment.  

This would be the opposite of tax increment financing (TIF).  Instead of lowering property taxes for improvements, the "land value tax" would hike taxes on neglected vacant properties -- forcing owners to either pay up or do something with rundown properties.

Some of the obvious reasons behind the "land value tax" would be:
  • Lower property taxes for responsible home and business owners in town.
  • Force negligent owners to sell or renovate their properties.
  • Provide the town government more revenue for economic development.
  • Make more in-town property owners have some "skin in the game."
As the story points out, these "land value taxes" are controversial, especially in communities where values are stagnant. And they can be difficult to implement because a taxing entity must estimate the value of the land and the value of improvements separately. 

Still, we continue to think this tax or one like it to address vacant properties should be considered by Dorchester's five village representatives and perhaps put to the voters in the form of a ballot question.

Since Dorchester has no sales tax and no LB840 program, few other options exist.  We reported earlier the Legislature is kicking around a possible state solution.

Maybe the best idea comes from Vancouver, British Columbia, where a lack of available housing prompted the city to impose an “empty homes tax” that assesses a 1% surtax on any residence that is not considered the owner or a renter’s “primary residence.”   Oddly enough, Dochester, too, faces the problem of too little available house -- recently demonstrated in the 24-hour sales of two well-kept homes.

To make a difference in Dorchester, it might take a 5% surtax on properties vacant for more than 18 months -- and properties that aren't the owner's primary residence.  For example, the $30,000 vacant home and lot in town -- which currently costs an owner roughly $425 a year in property taxes -- would suddenly see $1,500 added to that yearly property tax bill.

We'd guess that extra taxation would get vacant property owners to either sell or rent their empty homes and buildings that currently only detract from Dorchester.


  1. I hate to say I agree with a fee or tax, but I think the blog author(s) have it right. Some of these abandoned homes are being used for cheap storage or just completely abandoned, costing a couple hundred dollars in property tax.

    The blog may care about looks, but I see it as more of a lost opportunity for families wanting to move here and the village, which makes most of its money from utilities (trust me, I know this for a fact).

  2. This would certainly be a start. Perhaps letting the citizens weigh in or vote on this would be helpful. Check with the county assessor. She would have the land/lot values and building values separate. Maybe an assessment like they do for sidewalks in larger cities would work, too.

  3. ..........can i graze my cattle on that guys lawn? .................. i pay good for pasture like that .................

  4. Do people not take any pride in their belongings? I would be embarrassed to own some of those properties.

    1. Pride is a commodity that's becoming more rare these days everywhere I look. People will blame everyone else or every thing else before themselves.

    2. Pride is a commodity that's becoming more rare these days everywhere I look. People will blame everyone else or every thing else before themselves.

  5. If it really comes down to making someone pay extra I'd vote yes. It's hard to tell everyone how great our community is when there is little to nowhere for rent or for sale.


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