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.
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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.
References in periodicals archive ?
He said that if the taxation of the unearned increment was adopted as a principle, then it would be logically inconsistent to argue for exemptions: 'there is obviously no justification on principle for any exemption at all', and any argument for exempting small properties would be a 'political dodge' to bribe the small holders into acquiescence (IV.11.456).
But George was not prepared to adjust his policy to deal with the situation where government had already received at least some of the expected unearned increment in the purchase price paid by private individuals.
Farrell's concession that the unearned increment is only part, and not the strongest part, of the argument for land-value tax raises another important question.
A further question that should concern the Georgist movement, then and now, is: if Farrell, a leading Georgist in 1890, was correct, and if the unearned increment is not the strongest argument and not an essential argument for land-value taxation, why do Georgists continue to use it?