Land Value Tax in Cape Town

Project Summary

When you tax something, you get less of it. That’s why we tax tobacco. But most taxes fall on things we want more of: income, labour, housing, investment. This shrinks the economy.

Land is the exception. Its supply is fixed. You cannot reduce the amount of land by taxing it. Economists call this “zero deadweight loss.” Milton Friedman called it “the least bad tax.” Joseph Stiglitz - who disagrees with Friedman on almost everything else - demonstrated the “Henry George Theorem”, showing that public investment increases land values by an equivalent amount. This is the economist’s favourite tax that politicians have seldom implemented.

So why don’t we have it? Because landowners vote, and they may not know what they’d gain. We hypothesise that most suburban homeowners would actually pay less under a Land Value Tax (LVT), with the burden falling on speculators and owners of underutilised prime land. But nobody has ever shown voters their personalised “shadow bill.”

This project builds that tool. For the first time, we will show every household in Cape Town exactly how their taxes would change under LVT. This is the missing piece for political viability.

Why Cape Town?

Cape Town is one of the most spatially unequal cities on Earth, a direct legacy of apartheid planning. LVT directly addresses this by ensuring those who contribute to the city’s development, are not taxed for doing so. The City is unusually reform-minded (ranked Africa’s most efficient metro), and South African law provides clear pathways for implementation via the Municipal Property Rates Act.

Cape Town would also be the perfect exemplar city for generating policy evidence applicable to cities worldwide, demonstrating what LVT implementation looks like in practice.

Impact, Neglectedness, and Tractability

Impact: LVT could transform housing affordability, reduce inequality, and encourage development. A viable path to addressing South Africa’s land question without confiscation.

Neglected: Despite broad support among economists, almost no applied work estimates household-level effects. The theoretical case is made; the practical demonstration is not.

Tractable: The legal framework exists. The city government is receptive. Implementable policy research with a clear client.

Responsibilities

  • Literature review on LVT implementation and split-rate valuation methods

  • Data wrangling and cleaning (Cape Town municipal valuation rolls)

  • Machine learning and spatial econometric modelling to estimate land versus improvement values

  • Simulation of household-level tax incidence under LVT reform scenarios

  • Development of visualisation/interactive tool for “shadow bills”

  • Policy brief suitable for Cape Town municipal government

  • (Optional) Legal analysis of implementation pathways under the Municipal Property Rates Act

Outputs

  • Interactive map showing household-level tax changes under LVT (the first-of-its-kind tool)

  • Policy brief for Cape Town municipal government

  • Dataset of estimated land values across Cape Town

  • Working paper (stretch goal)

Ideal Candidate

Interest in development economics, housing policy, tax policy, urban economics, law, or spatial analysis. Coding experience (R or Python preferred) or strong willingness to learn. Interest in GIS/geospatial analysis or machine learning desirable but not required.

Skills Developed

  • Geospatial programming and analysis (R/Python, GIS)

  • Machine learning for property valuation

  • Applied econometrics and policy simulation modelling

  • Working with large administrative datasets

  • Translating academic economics into policy-relevant outputs

Mentor Bio

Peter Courtney is a joint PhD candidate in economics at VU Amsterdam (Tinbergen Institute) and Stellenbosch University, on a research stay at the Blavatnik School of Government. He holds the 2025 C. Lowell Harriss Dissertation Fellowship from the Lincoln Institute of Land Policy, an Oppenheimer Memorial Trust Fellowship, and an Emergent Ventures Grant. Publications with Oxford University Press and Brill; policy work for UNU-WIDER and South African National Treasury. Previous positions at J-PAL Africa and UN FAO. More info available here.

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