unearned increment
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Unearned Increment
Appreciation in the value of real estate without any improvement undertaken by the owner. For example, a parcel of land may become more valuable if a university is built nearby and the parcel becomes desirable for developers. The term originated in the 18th century as part of a proposal to tax the added value. See also: Unearned Income, Property Tax.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
unearned increment
The amount by which land increases in value because of generally improving conditions in the area,not because of any particular efforts by the property owner.The concept is important to a social theory made popular in the late 1800s by American journalist Henry George, but which still maintains broad appeal.Proponents,often called “Georgists”support the return of the unearned increment to society,in the form of large taxes on that portion of the increase in value of real estate.The concept is diametrically opposed to the current system of long-term capital gains tax breaks,which allow a property owner to retain more of the unearned increment,not less.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.