A pure land tax is market neutral because of being entirely paid by lowering prices in land supplied to the market; however it is an almost unattainable public policy objective. A Land Value Development Tax (LVDT) may be an alternative possibility, when levied where regulatory or infrastructural state interventions determine land prices increases. Even when the LVDT is still paid by means of a lowering of land prices (static neutrality), it might accelerate development timing (non-dynamic neutrality), and it can also have price increasing spatial feedback effects when not applied on all the spatial units of a region. We examine the LVDT applied in Bogotá (Colombia) during 2004-2010. This city offers an excellent opportunity for policy assessment since it has both a clearly determined pre and post-tax period, and spatial differences in application. This paper uses spatial panels to assess the LVDT impact on prices. We found that the LVDT had a negative effect on prices while not having any building output, or spatial feedback effects. The results allow us to conclude that the LVDT fulfils the static and dynamic neutrality conditions of a Pure Land Tax in spite of its scattered spatial implementation.