A nerd’s view of LVT
“Nerd” is commonly used as a pejorative term for someone who is overly intellectual, rational, logical and obsessive. It is often assumed that “nerds” are introverted and lacking in social skills. However, one of our contributors is happy to accept the term as a self description having spent a career inventing things, developing them, manufacturing them and selling them world wide.. He retired early from running his software and electronics company and has turned his obsessive interest towards creating a fairer society.
To declare all interests: he is a landholder (he holds 10 acres of land in front of the country house he converted into offices for his company) and a landlord (he owns the offices now occupied by his company and charges rent.) He is very keen on bullet points and adopts a zero tolerance policy towards management clichés – apart from one: “every problem is an opportunity”.
The image at the top of the page isn’t him - it was generated by ChatGPT!
Problems created by government policy
Council tax is unfair.
National and local services are crumbling.
Local Authorities are under-funded.
Insufficient housing.
Unfair distribution of income and wealth.
Unequal distribution of economic development.
Alienation and loss of trust in politicians and government.
North South divide.
4.3 million children living in poverty.
Over 2,800 foodbanks.
Facts
As a society we own all the land in the country through the crown.
Land represents 60% of our national a wealth.
As a society we control the use of land through the planning system.
The cost of land is the single highest cost when building a new home.
Our tax code is highly complex: 10 million words, 21,000 pages - 12 times the length of the complete works of Shakespeare and 12.5 times the number of words in the Bible.
Complex tax law creates loopholes which creates the worlds largest Tax Avoidance Industry.
The UK, with its dependent territories and the City of London, has become the world’s favourite for money laundering, tax evasion and tax avoidance.
UK laws on trusts make it relatively simple to avoid paying taxes on inter-generational wealth.
National legislation determines what services LAs must provide.
LAs are in the best place to deliver local services.
Solution
Scrap all taxes relating to property.
Provide 100% of LA funding from national government.
Introduce Land Value Tax at a rate that matches all Local Authority funding.
Why LVT will work
It is simple – anyone can understand it – it taxes the value of land, not the land itself.
Value is easy to understand – it depends where the land is and what it may be used for.
It is not a property tax – it does not tax buildings or gardens.
It does not prevent anyone from holding and using land – subject to planning permission.
It is applied at the same rate across the whole country.
It is fair since those with the most will contribute the most.
It is a general tax which can replace any combination of unfair existing taxes.
It will improve trust in government because it is seen as fair.
It permits no exceptions – not for anyone and not for anywhere.
It is impossible to avoid – you can’t hide land in a tax haven!
It is easy to implement. The Land Registry is already 89% complete and the Valuation Office Agency (VOA) can value all land. It bas done the job before and currently values property for Council Tax and Business Rates.
It is paid by freeholders, not by tenants. Freeholders are identified by the Land Registry.
It is collected nationally – a huge saving over the 300+ LAs that collect Council Tax. LAs can redirect resources to speed up planning decisions and to ensure that developers meet their obligations.
It allows the addition of national and local supplements. For example, on second homes, holiday homes, rental homes, airbnbs, property held by companies or by overseas entities, etc.
It immediately captures increases in value of land at all stages of development– from field to homes.
It ends land banking because developers will be paying full LVT on the land even before they start building.
It stabilises or reduces the cost of land for building new homes. Government has other tools for reducing the cost of building land - for example, compulsory purchase at current use value or at a specific multiple of current use value.
Business will move to areas where costs are lowest – areas with lower land values.
It mitigates the effects of change and ensures that no one will have to move home. It will be phased in over ten years to allow people and the housing market to adjust. It allows those who cannot afford to pay any increase over Council Tax to defer payment of the balance until the property is sold or transferred.