LVT Calculations

Formula for the basic LVT rate

R = AR / LV * 100

Where:

• R is the percentage rate to be applied to the value of all land with no exceptions.

• AR is the amount to be raised (see below).

• LV is the total value of all land in the country (see below).

This calculation is simple enough to be done by a year 6 pupil

To calculate the basic LVT rate we need to know:

• The amount to be raised.

  This could be the same as the amount currently collected as Council Tax.

  It could also include the amount currently collected as Business Rates. (* see note)

  It could be equivalent to the amount required to fund 100% of all LA services. (* see note)

• The total value of land in the country.

  This will assessed by the Valuation Office Agency.

These can be found easily, quickly, and cheaply, by “Preparing for LVT - getting the facts”.

The basic LVT rate also applies to land anywhere in the world held by UK citizens or residents.

Notes

The government currently takes 50% of Business Rates and provides grants to LAs.

If the income from LVT covers all LA expenditure LAs and government need to sit down and agree the list of services (and their costs) that LAs must provide - these need to be much broader and more accurately defined than now - though most are already covered by national legislation.

Supplements

LVT is designed to clearly separate tax from spending - it has no exceptions, no “tax breaks”, no loopholes and no favours for this group compared to that group.. The basic rate is paid on all land, everywhere, no matter who holds it. That’s what makes LVT the fairest of all taxes..

If government wants to give the equivalent of a tax break it can do it with spending, not by creating unfairness and loopholes.

Supplements are percentages added to the basic rate under specific circumstances.

So, a 200% supplement would triple the LVT rate for that type of land.

The more that can be raised by national supplements, the lower the basic rate. Please contact us for a simple spreadsheet that makes this clear.

The choice of which supplements to use is political but here are few suggestions:

National level:

• Freeholder not resident in the UK for tax purposes.

• Freeholder not a natural person (e.g. a company or trust).

• Freeholder not a UK citizen.

• Freehold held in a tax haven.

Local level:

• Dwellings that are not a primary residence.

• Holiday homes.

• Holiday lets.

• Airbnbs.

• Property not occupied for more than six months of the year in total.

• Property where activities cause environmental damage.

A local supplement could also be used to fund a specific project - with the agreement of the local electorate.

Wild speculation

We prefer facts, not speculation – that’s why we are promoting “Preparing for LVT – getting the facts”. However. the most common question we are asked is “How much will it be?”

The basic rate of LVT will be reduced if national supplements are used – see above.

Based on studies done to date, using estimates provided by the Office of National Statistics and others, wild guesses would be:

• Less than 0.7% if LVT replaces Council Tax only.
• Less that 0.9% if LVT replaces Council Tax and Business Rates.
• Less that 1.1% if LVT covers 100% of LA expenditure. (In this case government would also be able to reduce income tax or VAT).

We stress again that these are wild guesses – they should not be relied on.

“Preparing for LVT – getting the facts” would enable exact figures to be published.

Sample LVT bill

Mr Arthur C Prufrock
The Estate Office
Amble in the Vale
Monkton
DE67 12GU

DY567654: Land Value Tax for the year 2026/2027

Our records indicate that you are the freeholder of the land recorded by the Land Registry under title number DY567654.

You may check this by following this link: hmlr.gov.uk/title/DY567654.

The Valuation Office Agency records that the open market value of this land is £367,567.

You may check this by following this link: voa.gov.uk/valuation/DY567654.

Note: LVT applies to the value of the land only and does not include the value of anything on the land - buildings or other structures.

The basic rate of Land Value Tax (LVT) for the year 2026/2027 is 0.6% of land value.

There are no supplements applied to this land.

Your payment for LVT is therefore £367,567 * 0.6 / 100 = £2,205.40.

Payment should be made before 31st March, 2026.

We enclose details of how to make payments and how to set up a direct debit for this and future LVT payments.

We enclose details should you wish to challenge these calculations. Please note: late payment, for any reason, will be be subject to compound interest at UK bank rate plus 50% and may result in a lein being placed on the freehold title recorded by the Land Registry.

We enclose details should you wish to defer all or part of this payment until the property is sold of transferred. Please note: deferred payment will be subject to compound interest at UK bank rate plus 10%.