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LVT best for hard-working families

Written on . Posted in Land is wealth.

The Sunday Express last week came out with an article condemning what was referred to as a “land levy”.

‘A PLAN to scrap council tax in favour of a land levy was condemned last night as penalising hard-working middle-class families. The Land Value Tax was proposed by Compass, a Left-wing think tank close to Gordon Brown’s inner circle. It would raise even more than the £25.6billion a year currently taken by local authorities through council tax and would hit hardest those who have worked their way up the property ladder. Owners of family homes on decent-size plots with a garden, a drive or a garage would be hit harder than those who live in smaller properties. And if the house is near good schools or public transport links, the land would be taxed even more. Tory housing spokesman Grant Shapps described the idea as ­thoroughly unappealing. “The Prime Minister’s favourite think-tank has come up with an idea which will disproportionately hit hard-pressed families who are aspirational and doing their best to get on,” he said.’

Is this true? Who exactly will be hit?

To answer this question needs a good grasp of the arithmetic. There are going to be losers. It will be those people who were the big gainers in the change from Rates to Council Tax. They have done very nicely for 20 years. Their tax holiday needs to come to an end. The general principle is that if LVT is to raise about the same as Council Tax, then most people will pay less. If the median property is taxed at the same amount as at present then more will be raised. The property ladder is not something anyone works their way up. Those who bought at the right time (before about 2002), have enjoyed the benefit of rising land values. They have not worked for those values, which have gone up because other people have worked for them. “Free-riding” is an accurate description of the process. Those who are trying to create a scare should also remember that people who are well up this property ladder tend to be in their late forties or older, with children and grandchildren who may themselves have no chance at all of getting onto that ladder.

How should public services be paid for?

Those who oppose LVT need to be confronted with a simple question. How do they want public services to be paid for? Here are the other options.

  • Clobber hard-working families for working and reward the lazy and the cheats.
  • Clobber hard-working families  who improve their property.
  • Clobber hard-working families when they spend their hard-earned money.
  • Print the money and clobber hard-working families who have worked hard and saved.

Or perhaps they would prefer to let the roads go unrepaired and have their hard-working families’ grannies ending up crippled while the rubbish piles up in the streets. And do we want another housing boom-bust?

Britain is already the scruffiest and most run-down country in Western Europe. If, in the end, the British want to let their country degenerate to third-world standards and are too stupid and selfish to look beyond their front garden gate, that is what will have to happen. One can only do so much by campaigning for change.

The shadow minister will almost certainly have had a briefing from the press office of one of the big and powerful land-owning interests. Be sure, they watch like hawks for any mention of LVT. Perhaps it is time the great London estates returned to the Crown: ie all leases coming to the end of their 99 year term should revert to the Crown Estates Commission, with the rental income thereafter going direct to the Exchequer. That is what the Swedish king did in 1686. He busted the nobility by taking their estates off them. The land titles turned out to have been dodgy. Does the Queen need to do the same thing? At least one of the great London estates was alienated from the Crown by well-documented and outright fraud in the early seventeenth century. Whilst these powerful and wealthy interest groups persist, the chances of LVT getting a decent airing are low. And incidentally, one has to wonder whether the large land holdings of some of the Oxbridge colleges have an influence on what can, and can not, be taught about land.

Download the original Compass document here