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WHAT IS LAND VALUE TAX AND WHY WOULD IT BE GOOD FOR BRITAIN?

Land Value Tax (LVT) is a levy on the unimproved value of land, it disregards the value of building, personal property and other improvements to real estate. LVT has been referred to as "the perfect tax" and the economic efficiency of a Land Value Tax has been known since the eighteenth century. LVT is a progressive tax in that the tax burden falls on titleholders in proportion to the value of locations, the ownership of which is highly correlated with overall wealth and income.

Land Value Tax would be payable each year depending on the location and size of a plot. We advocate that it should replace some existing taxes. It should not add to the overall tax burden, its purpose is to shift tax away from income taxes . Land means the site alone. A vacant plot in a row of houses would be taxed the same as a similar built-on plot. It taxes the size and location of he plot. It does not tax buildings or other works.

There are three strong arguments for the tax. It is socially just. It is the best way of financing infrastructure. And it is economically efficient.

First social justice. Property taxes are fairer than income taxes. In the UK the wealthiest 1% own almost 25% of all property. Today we base the tax system almost entirely on income rather than assets. This means the very rich avoid paying their fair share of taxes. This entrenches inequality.

Second, infrastructure. The benefits of infrastructure are uneven. A fast rail line from London to Birmingham will provide a windfall for property owners in those locations. It won't benefit other locations nearly as much. At present every taxpayer, everywhere, pays. Land value tax corrects this. It recoups costs from those who benefit the most.

Third, economic efficiency. Land value tax is payable whether or not the owner actually uses the plot productively. It penalizes owners of empty houses; owners of run-down sites. Unlike now, they would be taxed at the same rate as a site in productive use. This would promote inner city regeneration. There is a myth that Land Value Tax would destroy green spaces. In fact, the City of New York made a profit when it created Central Park. It greened over existing built-up areas. The increased property tax from surrounding neighbourhoods paid for this.

In summary, Land Value Tax is pro-enterprise and green. Its introduction would allow other taxes to be reduced; especially those on income and profits. Enterprise would be better rewarded. Building on a property doesn't change its location value. The location value of land comes from geography -a beautiful view; or from investment elsewhere - for example a high speed railway. Location value is maintained by society. It just and efficient to tax it.

  • Mansion
    Article: Aug 29, 2018

    A new IPPR report argues that the reform of the dysfunctional land market is essential if the UK is to be a more equal, more productive and stable economy. It is also vital to creating a better-functioning housing market that delivers the affordable and quality homes the country needs.

    Land is an essential factor in all economic activity but, if it is not properly managed and regulated, it can play a destabilising role in the housing market and the wider economy. The UK's dysfunctional land market and soaring land values have helped drive growing wealth inequality, create the conditions for a broken housing market, and are a root cause of an unproductive and unstable economy. Reform of the land market must therefore be focused on reducing the financial speculation that occurs in land and sharing the benefits of increases in land values for the benefit of the public good.

  • Average Floor Space by Country
    Article: Jun 17, 2018
    By J G Šmíd

    In Lib Dem Voice on 3 June Helen Flynn urge the readers to come up with "big ideas" to solve our current housing market.

    Helen Flynn rightly identifies the issue is not of 'supply and demand': … problems in the housing market … are not necessarily problems of the housing market. Helen Flynn then singles out "distribution" of housing as the main issue: "Some people are occupying a lot more housing than others … others are squeezed out of the market entirely".

  • Steve Akhurst of Shelter, Prof J Henneberry, and Liz Peace CBE address the committee
    Article: May 26, 2018

    The housing, communities and Local Government Committee held a review of Land Value Capture on 8 May, which is now available on the web at the following URL: https://goo.gl/DxSCDM

    Steve Akehurst of Shelter estimated that only 25% of land uplift due to development is recovered for the community at present in the UK, as opposed to 80% in Holland or Germany.

  • mansion
    Article: Mar 14, 2018

    In the wake of the Salisbury attack, should non-Resident Russians be able to own homes in the UK? ALTER secretary David Cooper argues that preventing this could be an effective sanction that actually benefits the UK, see Guardian Letters...

  • Michaeal Meadowcroft (standing), Joe Bourke and Tony Vickers at the ALTER Southport Fringe
    Article: Mar 13, 2018

    Our fringe meeting at federal conference in Southport was entitled, 'Reforming business rates and council tax' with Michael Meadowcroft (standing in photo), a former Liberal member of Parliament and life-long campaigner invited to introduce the discussion.

    Tony Vickers of ALTER (sitting to the right) also spoke on more technical matters and solutions to the problems raised by our policy of using site value rating to replace the present taxation methods supporting local services...

  • Chris Glover
    Article: Mar 3, 2018

    ALTER has submitted its response to the Inquiry on Land Value Capture to the Communities and Local Government Committee Inquiry. Compiled by ALTER executive member Chris Glover, it criticises so called betterment taxes and explains why Land Value Tax is the way forward. It proposes several short term measure including removal of capital gains exemption for domestic property sale. The document can be read here.

  • Article: Feb 5, 2018

    The Communities and Local Government Committee (CLG) is calling for written submissions which examine the effectiveness of current land value capture methods, and the need for new ways of capturing any uplift in the value of land associated with the granting of planning permission or nearby infrastructure improvements and other factors...

  • Glasgow
    Article: Dec 19, 2017

    The Scottish Land Commisstion is seeking partners in a project to "assess, with reference to international experience, the potential of land value taxation to contribute to a more productive, accountable and diverse pattern of land ownership and use in Scotland and to identify a set of potential policy options that merit further consideration by SLC".

  • Article: Dec 3, 2017

    Alter welcomes the report https://institute.global/insight/renewing-centre/home-truths-progressive-vision-housing-policy-21st-century published by the Tony Blair Institute for Global Change.

    The executive summary is reproduced below:

    A housing crisis is sweeping through cities from Sydney to London to San Francisco. Following a short slump in 2008, house prices across the OECD have soared, contributing to a decline in living standards and a rise in wealth inequality. Today, housing is the source of economic anxiety, social resentment, and political frustration.

  • Article: Nov 27, 2017

    Former Liberal MP for Leeds and ALTER member Michael Meadowcroft has written a letter about land hoarding in the Sunday Times.

    Meanwhile well known LVT activist Duncan Pickard has featured on Radio 4 Money Box. Follow the link to listen.