5 ms·

The fascinating thing about the UK is that there is no land value tax. Some people say that council tax is the UK equivalent - but it only applies to furnished

by reedf1 6y ago

The fascinating thing about the UK is that there is no land value tax. Some people say that council tax is the UK equivalent - but it only applies to furnished dwellings. This means that a lot of land owners in the UK sit on large valuable pieces of land at almost no cost to themselves.

hpkuarg 6y ago
I dream of the day when a modern nation-state's expenses can be paid by land value tax and land value tax alone.
- d4rti 6y ago
  26,570 GBP / hectare / year, if all land was priced equally to replace total UK government revenue. [1] 1: https://www.wolframalpha.com/input/?i=uk+total+government+revenue+%2F+uk+land+area https://www.wolframalpha.com/input/?i=uk+total+government+re...
  - mrow84 6y ago
    An interesting figure! For easy comparison with the figures in the article it is around £10,000 / acre year - makes you wonder what some of the landowners listed would do in such a situation (and makes it obvious why they would fight very hard to prevent it coming about).
  - iudqnolq 6y ago
    You're assuming all land is privately owned, which isn't true in the UK. Large tracts are owned by the government, the royal family, and nobody.
- tim333 6y ago
  Not exactly a land value tax but zero tax Monaco is funded basically by the state owning and renting out property. I think similar in Dubai. There are some practical advantages - if you've got a patch of dessert and charge tax on it you only can get so much but if you develop a luxury apartment complex on said land and rent them out you can get rather more. The state has an advantage over private developers as it can grant itself permission to build whatever. I sometimes think you could do something like that in places like London - the state build lux accom to replace tax revenue rather than letting private developers clean up.
- est31 6y ago
  Kinda the opposite thing is happening right now in Germany. When introduced in 1968, the value added tax was 10%. Now it's 19%. Similarly, it was free for trucks to use the German highways. Now they have to pay fees. Only recently they expanded that to the federal roads as well (Bundesstraßen). As for the land, generally the federal government sells most of it to developers instead of developing it themselves (or letting developers develop and then charge rent on the land).
- lscotte 6y ago
  Sounds like you have some terrible nightmares!
shawabawa3 6y ago
Council tax is even worse as the occupier pays, not the owner
- ascari 6y ago
  This is so true. Many building companies own hundreds of low quality apartments in the cities and literally don't pay.
- rory 6y ago
  What happens when a property is unoccupied?
  - reedf1 6y ago
    If it is unfurnished and no one is living in the property then no council tax is paid.
    - clort 6y ago
      This is not necessarily true. In many parts of the country, you get a month free but otherwise the tax would need to be paid, which I guess is to cover landlords who are between tenants. (saves some effort setting it all up and tearing it down again when it was only empty for a week or so). Also, you may not be able to claim that month if it has been claimed in the last year.
    - pmyteh 6y ago
      It's actually up to the local council[0]. Oxford at least give you a month zero-rated, then start charging again (I'm in this position due to a messy move). [0]: https://www.gov.uk/council-tax/second-homes-and-empty-properties https://www.gov.uk/council-tax/second-homes-and-empty-proper...
      - rory 6y ago
        Oh wow: > You may pay less Council Tax for a property you own or rent that’s not your main home. > Councils can give furnished second homes or holiday homes a discount of up to 50%. Contact your council to find out if you can get a discount - it’s up to them how much you can get. I'm sympathetic to the messy-move case, but discounting the tax for holiday homes seems quite regressive.
TheRealPomax 6y ago
Take out the "valuable" because as you point out: there is no value tax. A lot of land owners in the UK sit on large pieces of land. The idea that land has value even when unused is one of this quirks of reasoning that seems "common sense" until you actually stop to think about it, because it makes no sense at all. And is one of the driving forces behind disenfranchisement of indigenous groups in so many countries.
- TheTrotters 6y ago
  By that logic an empty plot of land in Manhattan would have no value.
  - thescriptkiddie 6y ago
    If the owner is legally barred from using it and there is no hope of that changing in the future, then what value would there be?
  - TheRealPomax 6y ago
    Yes? That's literally the case: if there is no land tax in Manhattan either, then yes: that land has no value until someone decides to do something with it. But it also shows off how much the idea that "land = value" has been hammered into you. By default, land's just land. It doesn't have value until someone slaps some kind of "land management scheme" on top of it.
- neilparikh 6y ago
  Land definitely has value when unused. Land is the right to be in a certain geographic location, and exclude others from it. Why would that right not be valuable just because you're not using it? As the other commenter points out, that would imply that empty lots in cities are worthless, and we wouldn't see teardowns selling for millions.
  - TheRealPomax 6y ago
    No it is not. Land is just land, and different countries put different policies on top. Just because some land "is yours" doesn't universally mean you get to exclude others from it - as much as you think that's obvious and natural because that's how it is where you live/grew up, the idea that your land is off limits to others is entirely artificial. It's a choice your local government made with regards to land rights. Other places take a very different stance, where land is just land, and you don't get to exclude people from it just because you own it. If you put the land to use, then that part becomes off limit, but merely "being the owner" doesn't confer the right to cordon it off, and people are allowed to freely traverse it. You only acquired the right to generate income from that land. (e.g. folks can't go prancing about your crop fields, but if you own 100 acres and 80 of those are left alone because you live in a country where you value conservation, folks are entirely free to wander those 80 acres)

by reedf1 6y ago

hpkuarg 6y ago

I dream of the day when a modern nation-state's expenses can be paid by land value tax and land value tax alone.

d4rti 6y ago
26,570 GBP / hectare / year, if all land was priced equally to replace total UK government revenue. [1] 1: https://www.wolframalpha.com/input/?i=uk+total+government+revenue+%2F+uk+land+area https://www.wolframalpha.com/input/?i=uk+total+government+re...
- mrow84 6y ago
  An interesting figure! For easy comparison with the figures in the article it is around £10,000 / acre year - makes you wonder what some of the landowners listed would do in such a situation (and makes it obvious why they would fight very hard to prevent it coming about).
- iudqnolq 6y ago
  You're assuming all land is privately owned, which isn't true in the UK. Large tracts are owned by the government, the royal family, and nobody.
tim333 6y ago
Not exactly a land value tax but zero tax Monaco is funded basically by the state owning and renting out property. I think similar in Dubai. There are some practical advantages - if you've got a patch of dessert and charge tax on it you only can get so much but if you develop a luxury apartment complex on said land and rent them out you can get rather more. The state has an advantage over private developers as it can grant itself permission to build whatever. I sometimes think you could do something like that in places like London - the state build lux accom to replace tax revenue rather than letting private developers clean up.
est31 6y ago
Kinda the opposite thing is happening right now in Germany. When introduced in 1968, the value added tax was 10%. Now it's 19%. Similarly, it was free for trucks to use the German highways. Now they have to pay fees. Only recently they expanded that to the federal roads as well (Bundesstraßen). As for the land, generally the federal government sells most of it to developers instead of developing it themselves (or letting developers develop and then charge rent on the land).
lscotte 6y ago
Sounds like you have some terrible nightmares!

shawabawa3 6y ago

Council tax is even worse as the occupier pays, not the owner

ascari 6y ago
This is so true. Many building companies own hundreds of low quality apartments in the cities and literally don't pay.
rory 6y ago
What happens when a property is unoccupied?
- reedf1 6y ago
  If it is unfurnished and no one is living in the property then no council tax is paid.
  - clort 6y ago
    This is not necessarily true. In many parts of the country, you get a month free but otherwise the tax would need to be paid, which I guess is to cover landlords who are between tenants. (saves some effort setting it all up and tearing it down again when it was only empty for a week or so). Also, you may not be able to claim that month if it has been claimed in the last year.
  - pmyteh 6y ago
    It's actually up to the local council[0]. Oxford at least give you a month zero-rated, then start charging again (I'm in this position due to a messy move). [0]: https://www.gov.uk/council-tax/second-homes-and-empty-properties https://www.gov.uk/council-tax/second-homes-and-empty-proper...
    - rory 6y ago
      Oh wow: > You may pay less Council Tax for a property you own or rent that’s not your main home. > Councils can give furnished second homes or holiday homes a discount of up to 50%. Contact your council to find out if you can get a discount - it’s up to them how much you can get. I'm sympathetic to the messy-move case, but discounting the tax for holiday homes seems quite regressive.

TheRealPomax 6y ago

Take out the "valuable" because as you point out: there is no value tax. A lot of land owners in the UK sit on large pieces of land. The idea that land has value even when unused is one of this quirks of reasoning that seems "common sense" until you actually stop to think about it, because it makes no sense at all. And is one of the driving forces behind disenfranchisement of indigenous groups in so many countries.

TheTrotters 6y ago
By that logic an empty plot of land in Manhattan would have no value.
- thescriptkiddie 6y ago
  If the owner is legally barred from using it and there is no hope of that changing in the future, then what value would there be?
- TheRealPomax 6y ago
  Yes? That's literally the case: if there is no land tax in Manhattan either, then yes: that land has no value until someone decides to do something with it. But it also shows off how much the idea that "land = value" has been hammered into you. By default, land's just land. It doesn't have value until someone slaps some kind of "land management scheme" on top of it.
neilparikh 6y ago
Land definitely has value when unused. Land is the right to be in a certain geographic location, and exclude others from it. Why would that right not be valuable just because you're not using it? As the other commenter points out, that would imply that empty lots in cities are worthless, and we wouldn't see teardowns selling for millions.
- TheRealPomax 6y ago
  No it is not. Land is just land, and different countries put different policies on top. Just because some land "is yours" doesn't universally mean you get to exclude others from it - as much as you think that's obvious and natural because that's how it is where you live/grew up, the idea that your land is off limits to others is entirely artificial. It's a choice your local government made with regards to land rights. Other places take a very different stance, where land is just land, and you don't get to exclude people from it just because you own it. If you put the land to use, then that part becomes off limit, but merely "being the owner" doesn't confer the right to cordon it off, and people are allowed to freely traverse it. You only acquired the right to generate income from that land. (e.g. folks can't go prancing about your crop fields, but if you own 100 acres and 80 of those are left alone because you live in a country where you value conservation, folks are entirely free to wander those 80 acres)