Land value capture
Introduction
The capture, participation or contribution for appreciation[1]**,** or for capital gains (in English betterment tax or betterment levy) is a tax on real estate that increases its market value given the execution of works of public interest around it. It has a specific destination for the construction of certain public works, which in turn increase the value of the property, and the quality of life of its occupants or owners.[2].
It is common to hear that this regulation is called valorization, but technically it has fundamental differences.
There are different methodologies to apply it and each country creates the regulations and procedures to achieve it, but in general "It is not a tax, since there is no provision of a public service individually for each property, and it is not a tax, since it does not correspond to the value of the property. In the CM, works are built in exchange for land valuation, and the owners contribute to the construction of the infrastructure in proportion to the benefit obtained and their ability to pay"[3].
There are a variety of interpretations of this concept. Some academics understand it as "Value capture implies the possibility of generating and/or capturing public “value", from the improvements produced directly by public decisions or works",[4][1] others as "the taking of part of the increase in the value of land derived from tangible developments (public investment in infrastructure and services) and intangible developments (socioeconomic changes or in rules and regulations by the public sector); which allows municipalities, among other purposes, to produce and/or finance public goods and mitigate the pressure of fiscal stress"[5][1].
In Latin America
Colombia
In Colombia, the valorization contribution has been applied since 1921,[2] in other studies it is said that it has been applied more widely since the beginning of the 90s: "In Colombia, the concept of capital gains recovery was incorporated into the urban planning regime in the early 1990s, defining the participation in capital gains as one of the most important instruments. However, despite being such a powerful mechanism for government authorities at the local level, today more than two decades after the approval of the Law, it is little what is known about said instrument" [1].