One important pattern among highly urbanized countries is that they tend to rely more heavily on land-based taxes. A review of 64 countries shows a strong positive correlation between the urban population percentage and land-based taxes as a percentage of GDP.
The table presented in the adjacent box illustrates this point. While the average land-based tax revenue for these countries is about 0.75 percent of GDP, the average among highly urbanized, high-income countries is over 1.5 percent of GDP. The table suggests that as urbanization intensifies in a country, and especially if income levels increase,
the land becomes increasingly important in financing sustainable urban development.
Land-based Finance is a collective name given to a range of instruments by which local governments expand their revenue base and generate funds that will help them realize their service delivery, infrastructure development
and maintenance goals. The broader contexts within which this tool is being developed are local governance and sustainable urbanization. The Land-based Finance tool is premised on the fact that urban land is a key factor of production and an important source of financing for urban development, including infrastructure, social housing and basic services.
Land-based finance is a flexible set of instruments that can be adapted to a variety of institutional and cultural contexts. It aims to enhance the availability of resources for local development. This training package seeks to provide urban decision makers, managers and other community leaders at both the local and national levels with a broader understanding of the range of land-based financing instruments that are available and in use around the world. The land-based finance instruments are the following: Recurring land value tax and recurring building value tax, betterment levies, special assessments, developer exaction, land value increment tax, sale of development rights, sale of public land, lease premiums and recurring lease payments and transfer taxes and stamp duties are the land-based finance instruments.
Download ` Leveraging Land: Land-based Finance for Local Governments – A Reader` from the link below:
Download ` Leveraging Land: Land-based Finance for Local Governments – A Trainer’s Guide` from the link below: