I’ve seen politicians, activists, think tanks etc proposing a (kind of) land value/property tax for ending speculative land hoarding. They say that builders hoard land and create artificial scarcity to elevate real estate prices. Since such a tax will be a deterrent on holding large plots/flats, they’ll make more land available and make housing more affordable.

E.g. of proposals




I have two questions:

Although I follow their logic, I was interested in estimating how much could real estate prices drop if say some x sq m of land is made available once such a tax is levied. How can I estimate this? is their a clear mathematical relationship between availability of land and their prices?

In addition, how can I predict how could the industry benefit from this? because now it will be easier to expand/start new businesses and as rent will decrease, it’ll also increase the spending power of people. Is it possible to predict its results based on something quantifiable, say income?


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