land tax

This review of radical tax ideas prompted by reporting of the Labour conference is fascinating reading. It doesn’t profile labour policy instead it is a listing of a number of radical tax ideas from across the political spectrum. I have long been personally interested in the idea of a land tax – I know it would be divisive but it could really put some wheels under challenges such as rural affordable housing affecting the quality of life in rural areas. The description of the tax in the article is as follows:

Land value tax

One of the longest running debates over taxation is in the area of a land value tax. The measure focuses on the value of the land itself, rather than the value of things added to it such as buildings or crops.

Campaigners say that an annual charge on the rental value of land would be a “natural source” of public revenue and could replace taxes such as stamp duty and council tax.

The Land Revenue Taxation campaign says that the measure would encourage house building and put people off hoarding big areas of empty land or keeping empty houses.

“From an economic theory point of view, it’s very attractive,” says Cullinane. [Head of Policy at the Chartered Institute of Taxation] “But the more difficult thing is to value the land independently of what’s built on it.”

There is also a similar issue to the mansion tax, he adds, in that some people such as farmers may have big areas of land but not much money to pay the tax. “You can be very wealthy but does it necessarily mean you have ready cash?”