Perversely, if it was based on what the value of the property would be without any building on it, in lots of popular areas it would be more than the cost of the property tax because people will pay a premium for land where they can build what they want if the area is popular.
So I guess it can't be that way, as it would piss a lot of people off.
LVT, in its most pure form, isn’t based on any improvements (or lack thereof) to the land — the tax would be based purely based on the land itself, as if the home were NOT there.
Most likely, it would be heavily based on zoning, neighborhood, and proximity to jobs and transit. Take Los Angeles, for example. I would imagine you could actually see taxes in predominantly SFH enclaves like Calabasas or Malibu 1hr+ from job centers go _down_ while taxes on similar single family homes in West Hollywood or Beverly Hills, being much more incorporated into the urban framework of LA, would go up.
Wealthy people can still have their expansive estates elsewhere, but the incentive is to move them off of land that would have a better use serving more people: just as it doesn’t make too much sense for the Empire State Building to be built in Aspen, CO, it doesn’t make much sense for a single-family, detached vacation home with a white picket fence and yard to be built in the financial district of Manhattan.
So I guess it can't be that way, as it would piss a lot of people off.