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U7Q10 TT.
Suppose that the current market rate of interest is 10 percent. The market rent on a parcel of land is $6,000 per year. A 10 percent land tax is imposed. As a result of the tax, the price of the land parcel:

Impact of land tax on land price.

falls from 60,000 to $30,000
increases from $30,000 to $60,000
falls 10 percent
falls 20 percent

U7Q10 TT.
Suppose that the current market rate of interest is 10 percent. The market rent on a parcel of land is $6,000 per year. A 10 percent land tax is imposed. As a result of the tax, the price of the land parcel:

falls from 60,000 to $30,000
increases from $30,000 to $60,000
falls 10 percent
falls 20 percent