DENMARK - Analysis and SWOT

by Ole Lefmann

The author would like to thank Professor Peter Birch Sørensen, Copenhagen, for comments on an earlier draft. The viewpoints expressed below are those of the author.

The practice of Land-Value Taxation has deep roots in Danish history, possibly antedating the first historically known King Svend Forkbeard (985-1014). Often in history powerful men succeeded to withhold the rent of land they should collect on behalf of the King; in fact most unrests and hostilities through history were over capture of the rent of land, which wording means the result of production when rewards have been paid to manpower for labour and to investors for investments.

Many times through history when the economy of the society needed restoration, rulers took to one or another type of LVT that mended the mess.

Progress and defeat. Modern Land Value Taxation began its progress in Denmark in the 1880’s and went on until in 1960 it began to decline because of a fatal failure during its implementation.

When it was introduced in Denmark in the middle of the 1880’s many Danes found it being a revitalization of the Old Danish tax on yield-ability of land (nature); and it did not take long before politicians seriously discussed the practicality of the idea.

In 1905 was established the political party The Radical Liberals who proposed Land Value Taxation instead of taxes on labour and consumption. Though this party in the beginning had only few seats in the parliament a widespread sympathy among politicians of other parties enabled it to gather sufficient support to have some legislation in favour of Land Value Taxation passed through Parliament.

However, this did not satisfy impatient Land Value Taxers who now entered a coalition with other radical idealists and named it The Justice Coalition. In 1919 this organisation transformed to the political party called The Danish Justice Coalition, in English tongue usually called The Danish Justice Party.

With one Land Value Taxation party already in the Parliament, a second wooing to the electorate and several supporters in the seats of the traditional political parties Land Value Taxation legislation speeded up. Various kinds of Land Value Taxation were introduced at the three governmental levels - municipalities, counties, and the State. They were all far from the ideal LVT-system - but the idea was seriously discussed and gradually progress was made.

After World War II, in 1948, the Danish Minister of Finance appointed a commission whose members should scrutinize the possibilities and consequences of introduction of Full Ground Duty (Land Value Taxation levied to the full on market prices of all land in Denmark). That commission published its report in 1954 in which the majority recommended a tax of 4% on publicly assessed marked prices of all land in Denmark.

In 1957 the three political parties: the biggest the Social Democracy and the two smaller: the Radical Liberals and the Danish Justice Coalition Party got enough votes to construct the so called Ground Duty Government; called so because at its inauguration it declared that it would collect as much rent of land as would be politically possible.

This declaration and the facts that many Politicians and Civic Servants were convinced of the virtues and advantages of Land Value Taxation; that pilot projects and tests had been carried through (after 1915); that 45 years negotiations had taken place about how to phase out old taxes, about the preferable proportion between tax on land values and tax on improvements including buildings, and about the preferable relations between various levels of governments; that a ministerial Sub Committee appointed 1948 had scrutinized possibilities and consequences of a general and full governmental collection of the annual rent of all land in Denmark and recommended LVT to the State in its report in 1954, convinced building entrepreneurs and other developers that high land-value taxations would now become the reality, which made it interesting for them to shift their passive investments in land on to productive investments.

During the Ground Duty Government (1957-1960) Industrial production went up - it more than doubled; private investments were three times bigger than public investment; employees and entrepreneurs earned higher real income than ever before; inflation disappeared almost; savings soared immensely; unemployment almost disappeared to around 1 percent; foreign dept was reduced considerably; domestic and foreign trade expanded, and at the end of the period (1960) all economic forecasters expected further economic progress and prosperity.

How much of the progress was due to the formation and activities of the Ground Duty Government is difficult to estimate exactly, as other countries experienced economic progress in the same period; but in Denmark the progress was eminent.

Nevertheless, in 1960 when the mandate to the Ground Duty Government should be renewed all the three government parties lost seats, but The Danish Justice Coalition Party lost all theirs. After the election the Social Democratic Party was still able to take power together with the Radical Liberals, but none of them promoted Land Value Taxation to the State any longer. The new government expected land value speculation to increase because of the overall economic optimism, and LVT would have been the rights means, but instead of that the new Government took to other but less effective means.

After the defeat of the Ground Duty Government no influential or career-seeking Danish politicians spoke in public in favour of LVT. That was the first step down stairs from the political practice of using Land Value Taxation. Degradation of the practice of using LVT for public revenue h6ad begun and it accelerated during the coming decades; the biggest blow was the abolition of the Incremental LVT (TIL) in 1965, as described below.

Economic analysts could all say that the defeat of the Ground Duty Government and the wiping out of the Justice Coalition Party was not the result of bad economic administration, and that during the period of the Ground Duty Government, 1957 - 1960, Denmark enjoyed prosperity better than ever as described above

See also the paper written by Dr. Louis Wasserman, 1962:

The reason for the defeat of the Ground Duty Government and its LVT policy in 1960 was not a failure in the assessment of the market prices of land, which functioned very well and was praised by professional assessors in many countries around the world; nor was there a failure in the collection of the LVT; neither was it because of bad effects on the national economics, which during the Ground Duty Government was at a stage as good as ever before as described above.

Economic analysts who examined the defeat of the Ground Duty Government have all emphasized that the reason for the defeat was political and succeeded because Danish proponents of Land Value Taxation had not enlightened people in general well enough about the advantages of their proposal.

The failure was a naïve underestimation of the facts that 1) only few Danes knew what LVT was all about, most people did not know the good effects they already enjoyed because of LVT and that the possibilities of citizens in general would improve further when more LVT would be levied; people in general did not understand that the revenue of LVT belonged to them all in common. The other underestimation concerned 2) the extremely powerful opposing powers dominating the public media - electronic and printed, which imposed on people in general the understanding that LVT was a tax like all other taxes, that it would be unjust if only landowners should pay all taxes, etc. Further they emphasized that poor citizens having no income or only small income would not take advantage of reduction of income taxes, which was crucial because many LVT proponents promised reduced income tax when LVT was publicly collected.

The failure not to make people in general understand that the Values of Nature and Society belong to all citizens and should benefit them all on an equal footing made the electorate vulnerable to propaganda imposed by the wealthy opponents who were strongly committed to crush the attack on their privileges to enjoy the advantages of nature and society. The propaganda led to the result that the democratic election dismissed politicians who spoke for LVT. No influential or career-seeking Danish politicians have spoken publicly in favour of LVT ever since; but in the first decade of the 21st century it seems that political interest for looking at values of privileges as a source for public revenue has begun sprouting again.

Danish politicians still practice land value taxation but only to local governments and only at a diminutive level amounting to approximately 1½ percent of all collected taxes in Denmark. This is because the prevailing attitude is that taxes should be levied from as many different sources as possible. The notion that all people have equal rights to the unearned income of privileges such as landownership is still suppressed by holders of privileges who want to keep this income for themselves.

Incremental LVT to the State. In July 1960 the Parliament had passed legislation that revised and increased the ‘Incremental Land-value Taxation’ to the State Government; a tax that after some years would have made it possible to abolish an annually growing part of other taxes without reduction of public welfare programmes or to distribute annually to all Danes an annually growing Equal Citizens Bonus.

Tax to the State on Incremental Land-values (TIL) had been in use in Denmark since 1933. In July 1960 it was revised and updated; but in 1965 this the most promising (promising because it would not burden production like other taxes) Tax to the State was abolished. The TIL of 1960 had some practical weaknesses, which should have been changed, of course, but the opinion wanted it abolished altogether.

See the English Summary of Professor Gunnar Thorlund Jepsen’s book in Danish: From Tax on Incremental Land Values to Tax on Release, 1970.

LVT to local administration. When in 1965 this much promising tax to the State had been abolished Local Boroughs were given the rights to collect for local administration as much Land Value Taxation as they found appropriate. The boroughs around the country used this right differently; for some years the highest rate of LVT to local administration was 9% of updated and rather accurately assessed market prices of land of which 7% was to the Borough and 2% to the County.

In the borough of Brøndbyerne near to Copenhagen the annual rate of LVT varied; the peak was for some years 6.7 percent of realistically assessed market prices of which 4.7 percent was for the Borough covering 50% of the borough’s expenses, and 2 percent was for the County. With these rates the borough of Brøndbyerne was for a couple of years leading by collecting the highest rate of LVT in Denmark; but then the leading position was taken over by the neighbouring borough Albertslund collecting 9 percent, of which 7 percent were for the borough and 2 percent for the county.

The high LVT rates enabled the Boroughs to improve their infrastructure (roads, public utilities, schools, swimming halls, libraries, sports facilities, etc) in the fast developing boroughs close to Copenhagen; and to keep income taxes low.

See below a copy of a brochure (in Danish) published by the Social Democratic Party in Brøndbyerne 1968 with pictures showing - for residents living at different values of land (in Danish: Grundvurdering) - the citizens’ annual advantages of the Social Democrats’ proposal of high LVT (47 promille = 47 per thousands of values of land) and low income tax (10.5% of income), instead of the Conservatives’ proposal of high income tax (14%) and low LVT.

Be aware that residents living in a tower block would benefit most of all (Danish Crowns (kr.) 1,036 annually) enough for buying a fridge every year. Also notice that the market prices of land were not supposed to decline, because the total of tax expenses (LVT + income tax) did not rise.

The right for the local administrations in Denmark to decide the size of local Land Value Taxation as high as they would find appropriate was cancelled in the late 1970’s. Local administrations are still using LVT, but only at very small amounts making no more than 1½ percent of all collected taxes in Denmark.

The ruling tax philosophy since then has erroneously been and still is that LVT is a tax like other taxes; and as such LVT is used - not as the alternative to other taxes that burden production, which LVT does not - but as one of as many tax sources as possible.


Grundvurdering = Assessed Ground Value
Skattepligtig indkomst = Taxable Income
Det konservative forslag = The Conservatives’ Proposal
Socialdemokratiets forslag = The Social Democrats’ Proposal
Grundskyld = Ground Duty = Land Value Tax
Personskat = Personal Income Tax
Næste års skattefradrag = Next year’s reduction of paid LVT
47 promille = 47 per thousand


S W O T - Review of Experiences of the Danish approach to Land Value Taxation 1880-1960:


The LVT-legislations in Denmark 1910 - 1950 only implemented pilot projects and various tests of possibilities of Land Value Taxation. Though these initiatives did not provide the great advantages that will sprout from the full LVT program, it is possible to point to some advantages provided by the Danish LVT:


LVT accords old tradition. In most human societies the idea of Land Value Taxation accords old traditional understanding that: Nature belongs to everybody; and the advantages of Society - created by the synergy of the citizens’ activities and by public administration - also belong to all citizens. Public collection of full LVT will end few people’s appropriation of publicly created values and the value of nature.

LVT avoids burdens on production. Every amount collected via LVT saves the same amount from being collected from sources where it burdens production, which all taxes do except LVT.

LVT prevents Urban Sprawl. Even small amounts collected as land value taxation prevent urban sprawl that ruins economics and social life in great parts of cities where LVT is not practised. Urban sprawl is practically unknown in Denmark. [Urban Sprawl - socially and economically “dead or dying areas” - is pestering most of bigger cities in industrial countries wasting productive possibilities and prolonging distances between living parts of the cities meaning longer transport, daily loss of time and money on commuting and unnecessary use of fuel. And remember that like cultures of bacteria unpleasant Urban Sprawl spreads to its surroundings].

LVT improves local infrastructure. The high LVT rates that Danish local governments were allowed to collect enabled the Boroughs to improve their infrastructure (roads, public utilities, schools, swimming halls, libraries, sports facilities, etc and to keep income taxes low). Fast developing boroughs close to Copenhagen took advantage of this possibility; see the above copied brochure published 1968 and distributed by the Council of Brøndbyerne to their citizens showing the advantages of high LVT and low income tax - instead of high income tax and low LVT.

LVT finances public needs. The tax on incremental land-values implemented in 1933 seemed to be the preferred type of LVT, an updated form of which politicians in 1960 presented to the legislators who passed it through Parliament. Hadn’t it been abolished in 1965 it would have captured for the public purse substantial parts of any rise of land values after 1960; it could have develop the capacity to finance any need for public revenue without reduction of the Danish welfare system; and probably other taxes would gradually have been abolished because they are more costly to operate than TIL and/or have a much higher risk of tax evasion than TIL has. All implementation of new and better infrastructure would raise the land-values and the revenue of the TIL, and abolition of expensive and evasion-risky taxes would also raise the land-values and the revenue of TIL.

LVT is easy to estimate and cheap to collect. Though opponents like to discuss many questions around LVT, which will postpone the implementation of the reform (Some of the most usual queries are discussed below under Threats) it is a strength that Land Value Taxation is easy and cheap to estimate and to collect. What the system is meant to capture for the public purse and use for the benefit of all citizens is based simply on the highest amount of money that somebody is willing to pay for the right to exclusive use of natural resources. The market will reveal the size of that, and assessment of it is not a problem for people who are used to assessing land properties in their daily jobs, such as Estate Agents, Builders, Entrepreneurs, Insurance assessors, Valuers, Appraisers, Surveyors, Mortgage lenders, Developers, etc., and Officers of the Inland Revenue Department for Taxation of Real Property may consult / cooperate with such specialists.

LVT tested in Denmark through generations provides experiences for other countries!



The Danish experiences have not revealed any weakness in LVT as a tax-system, but the chosen way of implementation proved to have serious political weaknesses and the law on Tax on Incremental Land-values (TIL) of 1960 had adopted too many allowances and complicated methods of calculation.


LVT appeared as a tax like other taxes is no good. Danish LVT legislation before 1960 was experimental pilot projects and tests, only collecting small amounts by Land Value Taxation, which did not have the capacity to provide Genuine Democracy based on all citizens’ equal economic rights to the values of Nature and Society, which in Denmark was the main purpose of the reform. Tests and pilot projects were of course fine, but opponents used the inferior effects of it to make citizens believe that there is nothing special about LVT and that it is a tax like other taxes.

To avoid this misunderstanding, proponents of LVT must convince the citizens of the Good Effects expected to sprout from further implementation of the LVT programme. In a democracy well informed citizens are important because they being the electors are the persons who decide whether the reform shall go on or not.

LVT law with many allowances ran into a disaster. The Danish TIL (Tax on Incremental Land-values) that passed through the Danish Parliament 1960, was based on 27 years’ negotiations between different groups of interests and had got too many exceptions and allowances that caused complicated methods of calculation, which people in general - keenly supported by wealthy and influential opponents - found silly, unreasonable and/or even unjust. These awkward rules should of cause have been corrected; but the opinion was for abolition of the total scheme.

Professor Gunnar Thorlund Jepsen described these fatale problems with the Danish TIL in his book in Danish From Tax on Incremental Land Values to Tax on Release, 1970. Its English summary is embedded above.



The economic capacity of any modern society is great. Cooperation between differently specialized manpower presents a gigantic economic power. Free exchange of experiences, skill, techniques and goods mediates astonishing results. Free competition between inventors and producers speeds up the processes.


General people’s trust in money facilitates distribution. Today production of wealth and services performs a cornucopia; nothing seems impossible. Yet, human beings face serious problems because public power supports the practice to allow some citizens to take out growing parts of the results of the production of the nation without giving goods or services to the producers in return.

LVT is able to provide Equal Rights and Social Harmony that will come true when public power supports public capture of the rental values of all common properties (nature and advantages provided by public administration or by the synergy of the citizens’ interactions), so that everyone enjoying or using common properties pays the market-determined fee to the government who then uses the revenue to the betterment of all citizens.

The betterment of all citizens means either public provision and maintenance of needed infrastructure and catastrophe preparedness and public services or public distribution of equal shares to all citizens (Equal Citizens’ Bonus will make the citizens understand that the rent of privileges belongs to them), or both.

LVT is able to support Democracy

Democracy means governmental power to the electorate whose members have Equal Rights to express their points of view and distribute them, have Equal Rights to stand for a seat in Parliament, and have Equal Rights to vote for representatives to Parliament and for referendums. Today’s Democracy should be able to guarantee all citizens Equal Rights to the value of the Advantages of Nature and Society, which is possible by implementing full LVT, that will make Democracy work perfectly.

However, today’s’ democracies have been retained in their developments because of:



This reform challenges vested private interests that until today have been and still are able to collect and withhold the excess profit of holding land and other privileges and use it for their own satisfaction; and the privilege holders use their strengths and influences to impress a strong opposition against a change.


They have the necessary economy and they control the public and private information media, printed and electronic; they use these means to make universities, professors, journalists, politicians and other key persons dependent on them and make them understand which attitudes they should prefer and which they should suppress.

Of course privilege holders want suppression of all attitudes that aim for destruction of their privileges and of attitudes that spread or support information about their unjust capture of values that ethically belong to all human beings on an equal footing. They also want to further ideas that present alternatives to true information about their traditional anti-social attitudes and behaviour.

When privilege holders see that LVT is about to be implemented they try to postpone the process, try to spread confusion between the electorate and provoke them to vote NO. They turn the discussion away from their alleged exclusive “rights” to enjoy the advantages of nature and society; and instead they want to discuss other matters, such as mentioned below:

Mistrust to public administration. Privilege holders - who enjoy public protection of their privileges - are interested in a public opinion that asserts that public administration is ineffective; they will build up the opinion that administration everywhere is much better executed by private managers. But there is absolutely no guarantee that that is the case. It is right that monopolies imply the risk of becoming corrupt, rigid and ineffective but that is the case whatever the monopoly in question is executed by the public or by private.

People in general should be aware of the risk of corruption; wherever they meet it they should report it to impartial institutions, maybe to the independent press, or to a reliable ombudsman institution, and use their democratic rights to replace ineffective administration with effective management and administration, etc.

Democracy and equal rights have to be fought for every day.

Mistrust between Socialists and Liberalists. Opponents against LVT may take advantage of proponents’ different attitudes to the question of use of the revenue. The great idea is that the revenue of LVT shall be used for the betterment of all citizens on an equal footing; but that may be done in different ways such as:

  1. Public supply and maintenance of infrastructure and public services. Some call this way the socialistic way.
  2. Public distribution of the revenue in equal shares to all citizens who will decide how, when and by whom their wishes shall be met. Some call this the libertarian way.

The difference between these attitudes has the capacity to fuel long discussions during which energy and resources are wasted and the implementation of the most important part of the reform: end of few citizens’ taking of public properties is postponed. Privilege holders and their supporters will keep these discussions going on as long as possible.


As a compromise between above the above proposed 1) and 2) is to divide the revenue in two parts; e.g. two halves, one for urgent public needs and the other for equal distribution to all citizens having citizenship to the country in question. Equal distribution makes the citizens - alias the electorate - understand that the rent of land is theirs, belonging to all citizens on an equal footing, which should make them react against somebody who might try to capture greater parts of the rent of land for their private interest.

Claim on compensation. Time, energy and resources may also be wasted on discussions about compensation to landowners for loss of the rental value of their privileges. However, claims on compensation should not postpone implementation of LVT, because

  • - The implementation of All citizens’ equal rights to the rent of land cannot be implemented over night; it will be implemented gradually over some years, during which time the reform will aggregate increased values to all citizens so that in all probabilities nobody will suffer loss of value for which to claim compensation. - Exclusive rights cannot exist without protection by the society’s supreme power; meaning that values of exclusive rights factually are made and maintained by the government on behalf of all citizens and therefore belong to all citizens in common. - It is just right to collect publicly created rent of land instead of taxes on production. - Compensation for termination of injustice would just prolong the injustice. - There is no tradition for compensation for revenues publicly collected for public reforms or new tasks. - Landowners may say that it is unjust to collect the revenue needed for public administration and public services from only landowners; but the situation is that if landowners are also producers they may keep untaxed income of their production in the same way as all other producers. Landvalues are not for individual landowners but for all citizens in common.

Pedantry. Also it is a threat that some politicians and economists incline to go into pedantry (often instructed by privilege holders who want to continue keeping the rent of land for themselves). It appears from the above mentioned Danish book by Professor Gunnar Thorlund Jepsen and from its English Summary that for decades Danish Politicians, Economists and Civic Servants discussed carefully all aspects of Land Value Taxation. Too carefully in fact as it seems that the more the discussions focused on details the more complicated became the calculations of the tax, the more were raised demands for exceptions from LVT, and at the same time grew the risk of making mistakes.


Corruption. As is the case everywhere monopolies exist and power is concentrated we have to face the risk of corruption in assessment and collection of the LVT to be paid to the public purse by individual users of the advantages of nature and society. There is no risk of corruption in equal distribution to all citizens.

Assessments of LVT have to be publicly displayed and everyone should be able to protest against too high or too low assessment of certain sites of land; further, people in general should be aware of the risk of corruption, should report to impartial institutions, an independent press, an ombudsman institution, etc.

LVT proponents had difficulties in being heard and seen. The fact that public media - printed and electronic - was controlled by opponents against LVT had a catastrophic effect on formation of the public opinion about the implemented LVT in Denmark in 1960. It will also present a disastrous threat to LVT implementations in other countries if all media of information is controlled by wealthy tycoons whose interest is to keep the electorate in ignorance of the good effects of full Land Value Taxation including its capacity to end private capture of the value of nature and of advantages of the society.

People in general have to be well informed of the fact that the Values of Nature and Society belongs to all citizens who shall benefit from it equally. They do not have to put up with private capturers’ violently preventing them from their natural heritage.




The proponents of LVT must make the citizens understand that Good Effects will sprout from further implementation of the LVT programme. (Equal distribution of shares of the revenue, might be the way to make them understand it).

Only if the citizens feel deep in their hearts that the values of Nature and Society belong to them - and not to few privilege holders only - will they refuse the intense propaganda imposed to them by wealthy privilege holders and their supporters who want to continue capturing free lunches of privilege profits for themselves.

If people in general do not understand this the democracy will go on protecting economic injustice.

5 August 2007, Ole Lefmann