7 ms·
In the U.K. farmland has a rental value of about £100 an acre but a purchase price over £10k an acre. The value in the land isn’t in its use (which is getting
by chgs 2y ago
In the U.K. farmland has a rental value of about £100 an acre but a purchase price over £10k an acre.
The value in the land isn’t in its use (which is getting 1% ROI), but in speculation it may be granted permission to be converted to housing, or because of tax loopholes.
- blitzar 2y agoThe owner also get capital appreciation / depreciation of the land - ~5.7 per cent per annum over the last 100 years bring the total return to a 6.7% ROI. Land at the edge of cities and towns where there is a reasonable chance of development happening costs orders of magnitude more than the average. The person renting that land then farms it (presumably for a profit) for additional ROI.
- pjc50 2y agoYes, this came up in the recently closed inheritance tax loophole; people were buying "family farms" purely to leave to their children while doing the minimum of farming.
- chgs 2y agoYes speculation and tax avoidance. Neither of which are behaviours we want to encourage.