The term ‘unimproved land value’ is widely employed in much writing on LVT, but can be misleading. What is intended is to make the distinction between a site that has been developed or built upon (improved) and a vacant site where no apparent development has taken place (unimproved). The problem with this term is that it leaves unresolved various anomalies that might arise when trying to establish the actual meaning of ‘unimproved’ for the purposes of taxation.
Perhaps the commonest example is that of farmland, which from an urban point of view would appear to be unimproved but which may have benefited from generations of careful cultivation, drainage and irrigation. But the evidence of these improvements may not be readily visible and would represent no advantage to any prospective urban developer.
If one were to take unimproved land as meaning ‘in its original natural state’, a great deal of farmland would still be covered with dense forest; the familiar quilt of the English countryside that we all love is due to active deforestation, to make way for agriculture that took place centuries ago. At the other extreme are industrial sites, which have been built upon and developed. The necessary improvements in the form of structures, plant and machinery required for the industrial production becomes a liability when the industry goes into decline and the site is abandoned; no little expense is required to clear the site and render it ‘unimproved’ and usable for some other purpose. Another example is that of land reclaimed from the sea, which is quite common throughout the world; the so-called unimproved site would still be on the seabed. I would suggest, therefore, that the term ‘unimproved-land value’ should be avoided if possible, and only the simple terms ‘land value’ or ‘site value’ be used. This would imply the current market value of the site regardless of its history, or whether it is urban or rural.