Does a higher real estate tax rate for unbuild sites lead to an increase in the supply of building land : the case of the city of Espoo
Falkenbach, Heidi ... [et al.]
The prices for unbuilt building sites for residential use have been increasing in the Greater Helsinki Area, indicating a high demand for building land. According to the opinion of the decision-makers there is enough area covered by local detailed plans, but the areas remain undeveloped because private landowners are unwilling to build. As a solution the Finnish parliament enacted an amendment to the Real Estate Tax law, which obligates the municipalities in Greater Helsinki to impose an additional real estate tax rate to unbuilt building sites and plots built in violation to the plan. The main objective of the new legislation is to support plan implementation and increase the supply of building land. The aim of this study is to evaluate the effectiveness of the new tax legislation and understand, why privately owned building sites have remained unbuilt. The analysis was conducted on the example of the city of Espoo and was based on a survey of all owners of unbuilt building plots in the local detailed plan area in the city.
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