The lock-in effect of capital gains taxation on land use

Article Abstract:

A simple model of land conversion from agricultural land to housing land to reconsider the lock-in effect of capital gains taxation under perfect foresight is investigated. This examination assumes that there is no rental market for land. It is shown that the capital gains tax generates a difference between the lands of different lands although it relies on the purchase price of agricultural land, whether capital gains taxation producers positive or negative lock-in effects on agricultural land. The consequence of this is an inefficient distribution of land in any case, a lock-in effect on the stock variable. The investigation also found that a tax on realized capital gain prevents land conversion from agricultural use to housing use, a lock-in effect on the flow variable. The study also shows that an expected rise in the tax rate expedites land development. This leads to in less housing land because of a lock-in effect on land development.

Capital gains tax

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Insights on the effect of land use choice: the perpetual option on the best of two underlying assets

Article Abstract:

The impact of land use choice on speculative land value development timing is examined. For the study, the single-use option model of vacant land valuation is used. Results demonstrate that, under typical economic conditions, land use choice can boost the value of land by at least 40%. However, it is also discovered that land use choice defers development, as compared to single-use zoning, when alternative land uses are valued in a similar fashion. The conditions for optimal land development become significantly harder to attain when the two land uses employ similar values. In fact, the application of equal values for alternative land uses allow for a rational indecision that results in the non-exercisability of development no matter how high built property value becomes as compared to construction cost.

Valuation

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Highway franchising and real estate values

Article Abstract:

A model is build to assess the welfare implications of allowing large developers to participate in these auctions. The strategies of large real estate developers and how these strategies affect social welfare are examined.

United States, Social service, Social welfare

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