Virginia and Kentucky Enable the Land Value Tax in 2026

⏱️ Reading time: 12 min

Virginia and Kentucky enabled in April 2026 laws that allow their municipalities to charge separate taxes on land and on what’s built on top of it. It’s the biggest legislative victory for Georgism in several decades.

📑 En este artículo

1. TL;DR
2. What Happened
3. Context and History
4. How the Land Value Tax Works: The Mechanics of the Split Rate
   1. The Artificial Intelligence Angle
5. How to Track These Laws
6. Impact and Analysis
7. What’s Next
8. Frequently Asked Questions
   1. What exactly is the land value tax?
   2. How does it differ from the single tax Henry George proposed?
   3. Why does this matter to someone who works in tech?
   4. Is it already working anywhere?
   5. What does a city need to implement it?
   6. Where can I track legislative progress in real time?
9. References

The momentum isn’t a coincidence. The same wave of capital that artificial intelligence is channeling toward San Francisco and Seoul is pushing urban land prices to levels that even tech startups can’t afford without passing the cost on to their employees.

TL;DR

• Virginia and Kentucky enabled laws in April 2026 that let municipalities charge separate rates on land and buildings.
• Washington State is negotiating a land value tax bill with the Sightline Institute for the next legislative session.
• New York extended Kathy Hochul’s authority to fund the IBX subway with land value capture.
• The United Kingdom elected Andy Burnham as prime minister, a longtime advocate of the land value tax.
• South Korea has had Lee Jae Myung as president since 2025, another leader favorable to the land value tax.
• Baden-Württemberg (Germany) implemented its LVT in January 2025 and survived a legal challenge, though with a low effective rate.
• The AI boom is driving up land prices in San Francisco and Seoul, reviving academic interest in Georgism.
• Lars Doucet, author of Land is a Big Deal, now leads research at the Center for Land Economics.

What Happened

Georgism takes its name from American economist Henry George, author of the 1879 book Progress and Poverty. His central thesis: economic progress drives up land prices in attractive locations, and that rent goes to whoever owns the land, not to whoever works or innovates on top of it.

Five years ago this was almost purely a topic of blog debates. Today, according to game developer turned researcher Lars Doucet, the land value tax has the strongest legislative momentum in decades. Virginia and Kentucky passed enabling laws in April 2026 that let their cities adopt a split-rate tax: lower on construction, higher on land.

In Washington State, the Center for Land Economics is working with the Sightline Institute on a bill that hasn’t been introduced yet. In New York, Governor Kathy Hochul extended cities’ authority to use land value capture as a funding mechanism, intended to pay for the IBX (Inter-Borough Expressway) subway expansion. Doucet’s team is collaborating there with the Niskanen Center, the Center for Public Enterprise, and the Institute for Progress.

The wave isn’t limited to the United States. The United Kingdom elected Andy Burnham as prime minister, who publicly defended the land value tax for years before taking office. South Korea had elected Lee Jae Myung in 2025, another figure identified with the idea. And in Germany, the state of Baden-Württemberg implemented its own version of the LVT in January 2025, which survived a legal challenge, though with an effective rate still too low to draw firm conclusions about its real impact.

Context and History

Henry George wasn’t proposing just any land tax: he proposed the single tax, where the LVT would completely replace taxes on labor and capital. That radical version remains controversial among economists. What does enjoy broad consensus, from left to right, is the more moderate idea: taxing land value is, on paper, one of the least distortionary taxes that exists, because land can’t be moved, hidden, or made to stop producing out of fear of the tax.

Lars Doucet wrote the 2021 review of George’s book that won Astral Codex Ten’s first book review contest, the blog of psychiatrist and writer Scott Alexander. Readers flooded him with questions, which led to a three-part series titled Does Georgism Work?. He later republished it all on gameofrent.com and eventually turned it into the book Land is a Big Deal. Today he works full-time at the Center for Land Economics and writes on the Progress & Poverty substack.

📌 Note: the German case is the clearest reminder that passing a land value tax doesn’t mean it works. Baden-Württemberg set an effective rate so low that, according to Doucet himself, it’s still too early to measure its real impact on construction or land prices.

How the Land Value Tax Works: The Mechanics of the Split Rate

The version being legislated today in the United States isn’t George’s single tax. It’s a much simpler variant: the split-rate property tax, which splits the traditional property tax bill into two rates. One taxes the value of the land as it stands, empty. The other taxes the value of what’s built on it: the house, the building, the factory. The enabling law authorizes cities to set those two rates separately instead of a single combined rate.

In practice, this translates into a universal building exemption. The lower you set the rate on buildings and the higher you set the rate on land, the more you reward those who build and densify, and the more you penalize those who hold an empty or underused lot in an expensive area purely to speculate on its future appreciation.

def factura_predial(valor_suelo, valor_construccion, tasa_suelo, tasa_construccion):
    return valor_suelo * tasa_suelo + valor_construccion * tasa_construccion

# Example: a lot in Louisville, Kentucky, under split-rate
factura = factura_predial(
    valor_suelo=120_000,
    valor_construccion=80_000,
    tasa_suelo=0.025,
    tasa_construccion=0.010,
)
print(f"Annual bill: {factura:,.2f}")

This function calculates the property tax bill by combining both rates separately. With these example values, the result is 3,800 on a lot worth 120,000 in land and 80,000 in construction.

propiedades = [
    {"nombre": "Empty lot next to the subway",   "valor_suelo": 300_000, "valor_construccion": 0},
    {"nombre": "6-story building",         "valor_suelo": 300_000, "valor_construccion": 900_000},
]

for p in propiedades:
    factura = factura_predial(p["valor_suelo"], p["valor_construccion"], 0.025, 0.010)
    print(f"{p['nombre']}: {factura:,.2f} per year")

The result of this second example is George’s central argument: whoever holds an empty lot next to a subway station pays almost the same land tax as the owner of the six-story building next door, because both occupy the same valuable land. Building stops being penalized.

flowchart TD
    A["Cadastral appraisal"] --> B["Separate land value from construction value"]
    B --> C["Apply high rate to land"]
    B --> D["Apply low rate to construction"]
    C --> E["Final property tax bill"]
    D --> E

The Artificial Intelligence Angle

For a developer, the most relevant part might not be Kentucky’s law but what’s happening with land prices in the cities where the AI industry is concentrated. Economist Adam Ozimek argues that land will be one of the big winners of the artificial intelligence era: while software gets cheaper thanks to the models, the physical land needed to live near those jobs remains fixed.

In San Francisco and Seoul, the new AI millionaires are already bidding up housing prices, as Doucet describes it. Aksel Sterri, co-founder of the Norwegian think tank Langsikt, called for an explicitly Georgist framework to understand the economics of the AI era. This isn’t a new topic for Norway: the country has a century-old Georgist tradition in managing its natural resources, something Doucet himself, of Norwegian descent, documented separately.

💭 Key takeaway: if AI models keep lowering the marginal cost of producing software, physical location (and therefore land) paradoxically becomes scarcer and more expensive.

How to Track These Laws

The Center for Land Economics, the organization where Doucet works, maintains a public legislation tracker with an interactive map showing, state by state, which LVT bills are moving forward. To keep a pulse on this wave without relying on secondhand summaries, the simplest route is to write a lightweight script against public cadastral data, which in the United States is usually open at the county level.

# macOS / Linux / Windows (with curl installed)
curl -o cadastre.csv "URL_OF_YOUR_COUNTYS_OPEN_DATA_PORTAL"

With that CSV downloaded, the same factura_predial() function from the earlier examples can simulate how much each property would pay under different combinations of tasa_suelo and tasa_construccion, before the city sets them officially.

Impact and Analysis

Doucet admits in his five-year retrospective that his original theory about how Georgism would advance was wrong. He thought public opinion and economists needed to be convinced first, and that legislation would follow almost by inertia. What actually moved the needle was working project by project with state legislators willing to try a technical, low-political-profile reform, without waiting for prior national consensus.

That shift in strategy explains why the 2026 victories came in Virginia and Kentucky, local enabling laws rather than a federal mandate. It also explains the pattern in New York, where land value capture was pitched as a transportation funding tool, a pragmatic goal, rather than an ideological tax reform.

The practical limit of the land value tax isn’t theoretical, it’s a matter of appraisal. Separating land value from construction value requires up-to-date cadastres and trained assessors, something many U.S. counties and almost no Latin American city has today. Without that baseline data, any enabling law stays on paper.

What’s Next

In the short term there are three fronts to watch. Washington State could introduce its bill in the next legislative session. In New York, Doucet’s team, along with the Niskanen Center, the Center for Public Enterprise, and the Institute for Progress, is looking to turn the authority Hochul already extended into a concrete funding proposal for the IBX. And it remains to be seen how ambitious the Burnham administration in the UK and the Lee administration in South Korea turn out to be, something even Doucet isn’t ready to guarantee yet.

The underlying variable, according to several of the authors Doucet cites, is AI itself. If software keeps getting cheaper and physical location remains scarce, the pressure on land prices in tech hubs like San Francisco or Seoul isn’t going to ease on its own. That’s pushing more governments to look at the land value tax not as a 19th-century curiosity, but as a fiscal tool for an economy where code is cheap and square footage isn’t.

📖 Summary on Telegram: View summary

If you want to see the up-to-date legislative status with your own eyes, open the Center for Land Economics’ interactive tracker and filter by your state or country before reading any more secondhand summaries.

Frequently Asked Questions

What exactly is the land value tax?

It’s a tax that applies only to the value of the land, not counting the value of what’s built on top of it. In its most common form, the split-rate property tax, it replaces a single property tax rate with two separate rates: one for the land and one for the building.

How does it differ from the single tax Henry George proposed?

George wanted the LVT to be the state’s only tax, also replacing taxes on labor and capital. What’s being legislated today in Virginia and Kentucky is much more modest: it only authorizes differentiated rates within the existing property tax.

Why does this matter to someone who works in tech?

Because land prices in tech hubs like San Francisco and Seoul are rising, partly due to the wealth generated by the AI industry. The debate over how to tax that location rent directly affects the cost of living for anyone working in software in those cities.

Is it already working anywhere?

Baden-Württemberg, in Germany, has had an LVT in effect since January 2025 that survived a legal challenge, but with an effective rate still too low to draw firm conclusions about its impact.

What does a city need to implement it?

Above all, an up-to-date cadastre that can accurately separate land value from construction value. Without that appraisal baseline, the enabling law can’t actually be applied in practice.

Where can I track legislative progress in real time?

The Center for Land Economics maintains a public tracker with an interactive map that updates as U.S. states introduce or pass land value tax bills.

References

• Astral Codex Ten: Lars Doucet’s original article, “Does Georgism Work? Five Years Later,” with the full rundown of 2026 legislation.
• Game of Rent: the site where Lars Doucet consolidated his original “Does Georgism Work?” series before turning it into a book.
• Wikipedia: Georgism: historical context on Henry George and the development of the Georgist movement.
• Wikipedia: Land value tax: technical definition and international examples of land value taxes.

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Featured image: Foto de Martin David en Unsplash