Abstract
The authors develop a concept paper on the economic valuation of land. They detail the basic principles corroborated with the direct factors that modify the mathematical parameters and also the impact of construction on the land. Starting from the principles of Darin Drabkin, the authors develop, within the concept of a market economy, an urban land sale procedure by optimizing the control of land instruments. This study asks about the expected consequences of increasing the tax rate on the land component of real estate while reducing the rate at which the improvement is taxed. The first part briefly presents the consequences that land taxes are expected to produce given our theoretical understanding of land markets. These conclusions are blind to the planning and the institutional context of the development process. The consequences of moving from a general property tax to a land value tax in the Toronto and Ottawa regions are assessed by interviewing developers, planners and municipal finance officers. The conclusions summarise the main concerns that would be raised by moving toward land value taxation in the context of a growth management strategy that would make cities more compact.