Final answer:
Back property taxes are not included in the cost of land acquisition as they are obligations from prior ownership. The cost includes the purchase price, preparation improvements, and legal fees. Local government revenue from property taxes is affected by exemptions for nonprofit organizations and other factors.
Step-by-step explanation:
The cost of land would include all expenses necessary to acquire the land and prepare it for its intended use. This typically encompasses the initial purchase price, costs for clearing the land, any additional improvements such as sidewalks and curbs, and various legal fees involved in the transaction. However, one item that would not be considered part of the original cost of acquiring land is back property taxes. This is because back property taxes are obligations that are incurred from previous ownership and are not a direct cost of purchasing or preparing the land for use.
Local governments rely heavily on property taxes, which can fluctuate based on the economic health of an area, the quality of school districts, and overall desirability. Certain properties, such as those occupied by colleges, churches, and other nonprofit organizations, may be tax-exempt, affecting the revenue that can be generated from property taxes. For example, in Boston, nearly half of the city's assessed property value is exempt from taxes.