Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 11:08 am  

Sal Paradise wrote:

If there were no development opportunities on land owned by schools why has the government been selling off all the playing fields?

Are you suggesting that land say in the centre of London that currently has buildings sat on it would attract this tax or just unused green belt land?

No, what I'm suggesting is that all land, apart from common land, is subject to LVT. One major benefit from this is the Land Registry can finally put names to the 40% of UK land that has no "listed" owner or tenant (although even landowners are only tenants of the Crown).

A school field, as a school field has zero development potential and would be taxed accordingly. Whereas a school field that is up for sale with development potential is no longer a school field, it is a field with development potential and would be taxed according to that development potential.

LVT would also mitigate against the land bankers who simply buy land and sit on it, paying little or nothing while the value of the land increases. Tesco & Asda used to be prime culprits, buying land around an urban development simply to prevent a competitor buying it. I previously mentioned the route of Docklands Light Railway: some speculators bought land along the route and allowed it to remain vacant (whether it had buildings on it or not), simply to cash in once the DLR opened. The infrastructure improvements along the route were funded from general taxation. Why should a speculator be allowed to profit from improvements paid for from the general exchequer?

Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 12:37 pm  

cod'ead wrote:

No, what I'm suggesting is that all land, apart from common land, is subject to LVT. One major benefit from this is the Land Registry can finally put names to the 40% of UK land that has no "listed" owner or tenant (although even landowners are only tenants of the Crown).

A school field, as a school field has zero development potential and would be taxed accordingly. Whereas a school field that is up for sale with development potential is no longer a school field, it is a field with development potential and would be taxed according to that development potential.

LVT would also mitigate against the land bankers who simply buy land and sit on it, paying little or nothing while the value of the land increases. Tesco & Asda used to be prime culprits, buying land around an urban development simply to prevent a competitor buying it. I previously mentioned the route of Docklands Light Railway: some speculators bought land along the route and allowed it to remain vacant (whether it had buildings on it or not), simply to cash in once the DLR opened. The infrastructure improvements along the route were funded from general taxation. Why should a speculator be allowed to profit from improvements paid for from the general exchequer?

On your last point there has to be a reward for the risk or nobody would ever bother to invest - what if the DLR had been cancelled or re-routed then the investment would not have looked so great. The rumour years ago was they would build a second channel tunnel all of a sudden land in a certain part of Kent got bought but that hasn't come to pass so the investment looks a bit sick now.

Would you grade the land for taxation purposes? if so how would that be done equitably and who would pay the tax the landlord or the tenant?

Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 12:47 pm  

Sal Paradise wrote:

On your last point there has to be a reward for the risk or nobody would ever bother to invest - what if the DLR had been cancelled or re-routed then the investment would not have looked so great. The rumour years ago was they would build a second channel tunnel all of a sudden land in a certain part of Kent got bought but that hasn't come to pass so the investment looks a bit sick now.

Would you grade the land for taxation purposes? if so how would that be done equitably and who would pay the tax the landlord or the tenant?

If DLR had been cancelled, then the land purchaser would have lost nothing, the land would be the same value without DLR as it previously was without DLR. I cannot understand how anyone can be happy with taxpayers funding unearned income for land speculators.

Land is easier to grade for taxation purposes than land plus buildings, as is the current system. Revaluing land + buildings wasn't so diffcult when Council Tax bands were set. LVT would be paid by whoever owned the land, it would then be up to them to pass on the charge to their tenants.

What you must remember, LVT is not to be viewed as an additional tax, it is there as a replacement tax and the one thing that can be said, it really is a progressive tax

Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 1:31 pm  

cod'ead wrote:

If DLR had been cancelled, then the land purchaser would have lost nothing, the land would be the same value without DLR as it previously was without DLR. I cannot understand how anyone can be happy with taxpayers funding unearned income for land speculators.

Land is easier to grade for taxation purposes than land plus buildings, as is the current system. Revaluing land + buildings wasn't so diffcult when Council Tax bands were set. LVT would be paid by whoever owned the land, it would then be up to them to pass on the charge to their tenants.

What you must remember, LVT is not to be viewed as an additional tax, it is there as a replacement tax and the one thing that can be said, it really is a progressive tax

The landowner would have incurred the opportunity cost of what else they could have done with the money. If the government want to run projects through private land then there has to be some compensation to the land owner - surely that is an equitable trade off?

Agree on the second point this could be done by post code - but would local councils not lose out - instead of collecting cash they would be paying out for the land they own or would the monies be re-directed via the government rebate?

Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 2:36 pm  

Sal Paradise wrote:

The landowner would have incurred the opportunity cost of what else they could have done with the money. If the government want to run projects through private land then there has to be some compensation to the land owner - surely that is an equitable trade off?

I think you misunderstand what I said. I'm not talking about lanowners being compensated for having land compulsorarily purchased, rather I am talking about pure speculators who saw a chance to buy land, knowing that taxpayer-funded improvements to infrastructure would improve the value of that land. Many existing businesses along the DLR route benefitted from improvements in value, once DLR was finished. During this period they continued trading, often suffering problems associated with a major civil project that DLR would present during construction. The difference between them and the speculators was the businesses continued contributing in the form of UBR. The speculators paid no such taxes on their land or empty buildings.

Sal Paradise wrote:

Agree on the second point this could be done by post code - but would local councils not lose out - instead of collecting cash they would be paying out for the land they own or would the monies be re-directed via the government rebate?

At the moment UBR is collected centrally and then doled out to local authorities. LVT would be collected by local authorities and I imagine a subsequent reduction in the amount of UBR redistribution would ensue. Worked properly, it should see a reduction in the total taxes that businesses pay because they would then be "compensated" by those individuals and businesses who currently pay little or nothing finally having to make a commercial contribution

Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 3:05 pm  

cod'ead wrote:

I think you misunderstand what I said. I'm not talking about lanowners being compensated for having land compulsorarily purchased, rather I am talking about pure speculators who saw a chance to buy land, knowing that taxpayer-funded improvements to infrastructure would improve the value of that land. Many existing businesses along the DLR route benefitted from improvements in value, once DLR was finished. During this period they continued trading, often suffering problems associated with a major civil project that DLR would present during construction. The difference between them and the speculators was the businesses continued contributing in the form of UBR. The speculators paid no such taxes on their land or empty buildings.

At the moment UBR is collected centrally and then doled out to local authorities. LVT would be collected by local authorities and I imagine a subsequent reduction in the amount of UBR redistribution would ensue. Worked properly, it should see a reduction in the total taxes that businesses pay because they would then be "compensated" by those individuals and businesses who currently pay little or nothing finally having to make a commercial contribution

I see your point on point one but I also the position of the speculator - its still a risk and they have to stump up the money which will cost them.

One concern I would have is pension funds that have large land holdings including commercial property - rents are already driving businesses off the high street more tax will not help and empty premises will not help pension participants - maybe I am being too insular

Re: Is There An Alternative To The Current Economic Order? : Tue Dec 02, 2014 3:15 pm  

Sal Paradise wrote:

I see your point on point one but I also the position of the speculator - its still a risk and they have to stump up the money which will cost them.

One concern I would have is pension funds that have large land holdings including commercial property - rents are already driving businesses off the high street more tax will not help and empty premises will not help pension participants - maybe I am being too insular

It's not MORE tax, it is a redistribution of tax, the method of collecting it and from whom.

Another potential benefit, is to encourage building of more houses. There is no doubt that there is a chronic shortage of houses in the country. If housebuilders and other land-bankers suddenly found that they were liable for the tax on land that they'd bought and were sitting on until "the market was right". Tax that was levied at the "developed potential" instead of just an empty field, they might get their fingers out and start building the houses they already received planning permission for.

The main thing is, unlike, income, corporation or even capital gains tax, it cannot be avoided by offshoring or transferring assets into "trusts" (LOL). The land is clearly there, it is definable, as is the owner. It's simply something that cannot be avoided. Surely that has to be a good thing?

You never know, it could even lead to a means to abolish employers' NI

Re: Is There An Alternative To The Current Economic Order? : Wed Dec 03, 2014 9:02 am  

Here's an article of how broken the council tax system is When we get to the point that an oligarch can pay lower tax on a £100m+ apartment in London than a teacher would on a £200k house in Blackburn, we really do need to look at an alternative way of taxing land At least Scotland looks to change the nature of land ownership and taxation

Here's an article of how broken the council tax system is When we get to the point that an oligarch can pay lower tax on a £100m+ apartment in London than a teacher would on a £200k house in Blackburn, we really do need to look at an alternative way of taxing land At least Scotland looks to change the nature of land ownership and taxation

Re: Is There An Alternative To The Current Economic Order? : Wed Dec 03, 2014 9:38 am  

Did the teacher in Blackburn cough over 9m quid in stamp duty when he bought his house?

The teacher in Blackburn will almost certainly make use of council services. The rich fool who overpaid massively for that apartment probably doesn't make any use of council services whatsoever.

Re: Is There An Alternative To The Current Economic Order? : Wed Dec 03, 2014 11:18 am  

Lord God Jose Mourinho wrote:

Did the teacher in Blackburn cough over 9m quid in stamp duty when he bought his house?

The teacher in Blackburn will almost certainly make use of council services. The rich fool who overpaid massively for that apartment probably doesn't make any use of council services whatsoever.

So you are confortable with oligarchs driving up the prices of property in London to the extent that a teacher, fireman, policeman, nurse cannot even afford to actually live in the city?

The stamp duty argument is fatuous beyond belief, it's a once only hit, paid only when a property is sold. So the oligarch doesn't drive on any of London's streets, have his refuse collected, take advantage of anyone who has been educated in a London school?

Have you bothered reading much of this thread at all, or just done the usual and jumped in at the end?