Design your own LVT system
Mark Wadsworth has produced a spreadsheet which you can use to work out what levels of LVT would have to be charged if other taxes were replaced. Feeding in a few figures, the results seem plausible. Try for yourself and see. It looks as if most people would be better off. What a surprise! For an explanation of his methodology, Mark Wadsworth writes…
The figures for current tax receipts are straight from HM Treasury’s own figures
The known figure is how many acres of privately owned developed land there is, which happens to be 2.4 million, taken from DCLG’s Generalised Land Use Database which is incredibly detailed.
So we divide total revenues required by 2.4 million to give us an average rate for the whole of the UK (let’s ignore farmland, it’s tuppence ha’penny).
Now, we can’t have the same rate everywhere, so I apportioned it according to the average selling price of a semi-detached in each postcode district, very rough and ready, but there are over 2,500 inhabited postcodes, so it’s a good place to start. You can examine the maths of this on the second tab. So if average price of a semi in Swindon is £180,000 and average price in Wimbledon is £900,000, the rate in W is five times as much as in S.
Using a different rate for postcode sectors (of which there are about 10,000) or local council wards (which is how they summarise things for the Generalised Land Use Database, of which there are about 7,000) would be much better, it would also be much better to weight this for flat, semi, detached, terraced, and factor in Business Rates, council tax, Stamp Duty Land Tax etc, but hey (SDLT and Council Tax probably cancel out – the former depresses sellign price of expensive homes and the latter depresses sellign price of cheap homes).
It took me two days to do the rates for 2,500 postcode sectors. I reckon that if I cut and paste from Rightmove and do a weighted average of the prices for flats, semi, detached, terrace (assuming average plot sizes 150, 450, 600 and 300 sq yards respectively) it would take me about a month, full time, job done.