No A Land Value Tax is Not a ‘Garden Tax’

The Telegraph this AM on land value tax.

Opponents of the tax say it would cause house prices to plummet, putting homeowners at risk of negative equity and forcing families to sell off their gardens to developers to lessen their tax burden.

 Ah the attack line, start describing it as a ‘garden tax’
However land value tax is a tax on the value of land if developed to its permitted planning use.  As under the NPPF gardens are not counted as brownfield sites the size of the garden could not be counted in valuation, only the footprint of the house itself, the land the house stands on.
Whether it is wise or not to exclude gardens is another thing entirely.  It would be much better to zone which areas with large gardens are desirable to densify and to what degree and to allow taxation above a certain level for elderly occupants to be deferable until death.
As for the calculations of tax rises, nonsense produced by an afternoons works by a junior researcher – excluding as it does all development land, business land and vacant land.  According to Savills these account for 25% of land values.
According to those who have done the math 1.83% of value would raise the same sums as Council tax leaving 83% of households better off.
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5 thoughts on “No A Land Value Tax is Not a ‘Garden Tax’

  1. And don’t forget that (as the courts currently see it) it is only gardens in towns and cities that are not PDL – gardens in the countryside are PDL.

  2. “As under the NPPF gardens are not counted as brownfield sites…..” I don’t think this is correct as rural, countryside “gardens” wee deemed as brownfield by Justice Deputy Judge Charles George-
    ” But exclusions in the 2012 National Planning Policy Framework definition of “previously developed land” include “land in built-up areas such as private residential gardens”. ruled that this wording is significant.

    The judgement contends the rational explanation for the distinction must be that undeveloped land in urban areas is under more development pressure and so requires greater protection.

    https://brownfieldbriefing.com/44762/rural-gardens-are-brownfield-but-not-urban

  3. As I understand it the proposal is based on the work of the Labour Land Campaign. A look at their website find the statement “First off, the value of every piece of land in this country should be assessed. By ‘land’ we mean the site alone, not counting any improvements on the site. Thus, the value of any buildings, crops, drainage or anything else which people have put on, or done to, the site would be ignored. Then, after the land has been valued, a tax should be fixed on the basis of that value”

  4. The exchange value of a freehold title represents the capitalisation of “free rent “or “rent free” if you are a landlord or an owner occupier. Thus a 100% tax on the rental value of location would reduce both selling prices and rental incomes back to their capital only constituent. About a two thirds drop on average. This would also allow the market to rationalise our existing housing stock, reducing vacancy and under occupation. In England and Wales alone, owner occupiers consume 12 million more bedrooms than those that rent on a pro rata basis. The LVT would allow the market of reallocate those bedrooms to those that need them most, negating the need to build any extra new housing to cover changes in population/household formation for the foreseeable future.

    In which case, why do people think there is a problem with supply and that planning is somehow the cause of affordability issues.

    The problem is wholly on the demand side. Caused by the implicit subsidy to freeholders worth over £200bn per year because they do not pay compensation, as a tax, to those they exclude from using valuable locations.

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