Would a Land/wealth Value Tax help first time buyers and unlock the property market?

yertiz_2

I have searched the forum for a discussion on land/wealth value tax and can't find anything so I hope there are some of you with information or views on this. I have found some information from 'Moneyweek - Should we have a land tax?' dated July 29 2011 and the LibDems - ALTER website. They all have very positive comments saying it would make the wealthier pay more for their land, so I guess the 0.36% of the population who own two-thirds of the land would not vote for it. According to 'Moneyweek' it debates whether it may unlock the property market and help first time buyers.

Derivative

I'm in two minds about this.

On the one hand, the conservative streak in me wants to say that if you own a bit of land, it should be yours straight up, unconditionally.

On the other hand, it's pretty much a given that if we fast forward a few decades, under the current system property owners will hold all the cards - it's far easier to buy a second property than it is a first.

CLAPTON

devil in the detail of course, but yes a land tax would seem a good step forward
-it puts a price on the value base on the true value and not on whether it has been developed

so land with planning permission will be taxed on it's 'developed' value ; this should discourage land hoarding

a house on a large plot will be taxed on the development potential of the whole plot and not the particular house.

kabayiri

In principle, it would be a good idea I believe.

In practise, I don't have any trust in the government frittering away the proceeds from this taxation. I'd want the proceeds ringfenced into supporting the building of social housing, or something similar.

CLAPTON

kabayiri wrote: »

In principle, it would be a good idea I believe.

In practise, I don't have any trust in the government frittering away the proceeds from this taxation. I'd want the proceeds ringfenced into supporting the building of social housing, or something similar.

the aim of the land value tax isn't about the total amount of revenue it raises

it's about the better use of a scarce resource i.e. land

so if e.g. a low value commercial building was loacted in a high value residential area then it would be taxed at the high value residential value;
this would encourage the commercial undertaking to relocate somewhere cheaper

Itismehonest

CLAPTON wrote: »

devil in the detail of course, but yes a land tax would seem a good step forward
-it puts a price on the value base on the true value and not on whether it has been developed

so land with planning permission will be taxed on it's 'developed' value ; this should discourage land hoarding

a house on a large plot will be taxed on the development potential of the whole plot and not the particular house.

How would that work in areas where development is not allowed?
For instance areas where lack of water restricts development; Conservation areas; AONB; National Parks; land belonging to the National Trust (a major landowner but with charitable status) etc.
Would farmland be taxed? Or are you just referring to a tax on the land held by developers?

PasturesNew

Would that be instead of council tax? Wouldn't be able to afford to pay twice.

CLAPTON

Itismehonest wrote: »

How would that work in areas where development is not allowed?
For instance areas where lack of water restricts development; Conservation areas; AONB; National Parks; land belonging to the National Trust (a major landowner but with charitable status) etc.
Would farmland be taxed? Or are you just referring to a tax on the land held by developers?

clearly land where no development is allowed will have low value so will have a low land tax;
farmland would be taxed but at a rate appropriate to it's value ; so a hill farm is wales would be much lower rated that prime farmland

all land would be valued as in essense it is today and taxed accordingly (this would be instead of the current council tax at least in part)

the idea is bascially
- to encourage land use instead of being unused
- to encourage more efficient land use so prime land is used for the 'best' use and not wasted

mark5

PasturesNew wrote: »

Would that be instead of council tax? Wouldn't be able to afford to pay twice.

No doubt most ppl would end up paying more!

CLAPTON

mark5 wrote: »

No doubt most ppl would end up paying more!

surely it's trivially easy for government to increase tax at any time?

Itismehonest

CLAPTON wrote: »

clearly land where no development is allowed will have low value so will have a low land tax;
farmland would be taxed but at a rate appropriate to it's value ; so a hill farm is wales would be much lower rated that prime farmland

all land would be valued as in essense it is today and taxed accordingly (this would be instead of the current council tax at least in part)

the idea is bascially
- to encourage land use instead of being unused
- to encourage more efficient land use so prime land is used for the 'best' use and not wasted

I understand the theory I'm just not sure it would actually be terribly effective.
The 10 largest landowners in the UK in 2010 were:
1) Forestry Commission
2) National Trust
3) Defence Estates
4) Pension Funds
5) Utilities
6) Crown Estate
7) RSPB
8) Duke of Buccleuch & Queensberry
9) National Trust for Scotland
10) Duke of Atholl's Trusts

The vast majority of the above either hold charitable status or would require the tax-payer to foot the bill.

If I haven't missed a figure they hold 6,101,007 acres between them - the total acreage of the UK being 60,318,577 acres. I couldn't even begin to guess how much of the remaining acreage would be deducted because it is already developed but I think we may be left with relatively little over by comparison.
That's why I can see that a tax to deter developers from hoarding land could be beneficial but I'm not sure a general land-tax would.
Hope I've explained myself adequately