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Split-value tax proposal wins support as a local tool to encourage development
Summary
Subcommittee members discussed a split-value property tax—taxing land separately from improvements—to discourage land-banking and encourage building. Speakers noted several Virginia cities have adopted the approach and suggested Arlington could be the first county to pursue it.
Subcommittee members discussed the split-value tax as a potential tool to encourage development on underused parcels. One member outlined the policy concept: tax land and buildings separately so the land bears a higher relative tax burden while improvements are taxed at a lower rate, reducing incentives to hold vacant land for speculative gain and encouraging development.
Speakers cited recent Virginia localities that have sought split-value authority and noted that adopting such a tax is permissive and can be tailored in design to be revenue-neutral or revenue-positive depending on local choices. Participants discussed practical implications for Arlington, where land is scarce, and said the approach could make redevelopment of parking lots or vacant retail parcels more attractive while preserving incentives to invest in improvements.
Members requested supporting materials (including a video referenced from Falls Church) and asked staff to assemble resources that would clarify revenue impacts and design options. The subcommittee agreed to keep the proposal on the recommended priorities list and to provide the full commission with further analysis and documentation before any formal action.
