Futures Forum: A solution to our housing problems: tax land values and give councils powers to benefit from planning approval windfalls
Futures Forum: A solution to our housing problems: fix the broken land system
Futures Forum: A solution to our housing problems: land value capture
The Sun carries the latest idea:
Swapping business rates with land value tax would aid Britain’s Brexit heartlands, research claims
BIZ RATES CALL
Research found that a huge income boost would be delivered to England's 'left behind' communities who voted in support of Brexit if hated business rates were replaced
By Matt Dathan, Political Correspondent
28th August 2018
REPLACING hated business rates with a land value tax would help Britain’s Brexit heartlands the most, a major review will say this week. Landowners would be taxed instead of tenants under proposals to scrap the rates-based system put forward in a joint report by ex-Business Secretary Sir Vince Cable and economist Adam Corlett.
They say it will deliver a huge income boost to England’s “left behind” communities who overwhelmingly backed Brexit in the 2016 referendum.
The move would deliver a 21 per cent tax cut for businesses located in the top 20 areas with the highest share of Brexit voters. This compares to the nationwide average tax cut of 6 per cent.
It would also help to rebalance the north-south divide, with London and the South East seeing small tax rises while the rest of the country - 92 per cent of areas - would get tax cuts of up to 46 per cent. This is because of the much higher value of land in London and the South East.
The “commercial landowner levy” would no longer calculate business taxes using the rentable value of buildings and utilities - and instead only tax the land value of a commercial site. It means that the tax would fall on the landlord or landowner rather than the current situation where the renter pays.
The move would deliver a tax cut for hundreds of thousands of small businesses because six in ten rent their premises. The Government’s current review of struggling high streets has refused to consider a change in business rates.
But piling pressure on ministers to widen their review ahead of the launch of his report later this week, Sir Vince told The Sun: “Many of the areas around the country that voted for Brexit feel they have been left behind. Great swathes of the country demand better, and this policy offers change to the manufacturing industry and the small towns passed over by economic growth.”
Business rates were a badly designed policy to begin with and have become an unacceptable drag on our economy.
Swapping business rates with land value tax would aid Britain's Brexit heartlands, research claims - The Sun
The Guardian notes a report out today:
UK's wealth rises as land values soar by £450bn in a year
Land now 51% of UK’s net worth – a huge transfer of wealth to landowners, say campaigners
Phillip Inman
Wed 29 Aug 2018
Land for a new housing development near Cambridge. Photograph: Antonio Olmos for the Observer
A dramatic rise in land values pushed Britain’s wealth to a fresh high of more than £10tn last year, highlighting the huge gains made by developers in property hotspots across the UK.
From London and the home counties to Cambridge and popular parts of Devon and Cornwall, land values have become the single largest element of wealth, dwarfing household wealth locked up in property and financial savings.
Official figures showed that the UK’s net worth rose by £492bn between 2016 and 2017 to £10.2tn, with the lion’s share of the increase accounted for by a £450bn jump in the value of land. The rise continues a trend since 2012 that has pushed the average assets held by each Briton to £155,000, up £6,000 from 2016.
The Office for National Statistics said consistent increases in the value of land meant it accounted for 51% of the UK’s net worth in 2016, higher than any other G7 country that produces similar statistics. In France, which has a land mass twice the size of the UK, land values account for 41% of wealth while in Germany they account for only 26%.
This week several landowners have outlined plans for developments, including the Duke of Westminster’s Grosvenor Group, which said it was taking a growing interest in residential property outside central London. It said it would build thousands of homes on greenfield sites around Oxford and Cambridge, which are to benefit from Treasury plans to connect the two university towns with a cross-country rail link.
Analysts said much of the increase in land values was in response to Britain’s rising population, which has put pressure on the government to back house builders seeking to develop green field sites and farmland in south-east England and other development hotspots around the country.
The price of farmland can increase by 100 times when developers succeed in persuading ministers to redesignate it for housing. Areas of London that were previously derelict, especially in the east of the capital, have seen huge rises in values as regeneration efforts and improved transport links have fed into property prices.
Commercial property has also enjoyed an upswing in value since Britain’s recovery following the 2008 banking crash, more than offsetting recent declines in much of the retail sector.
The ONS figures go beyond a study last year by Lloyds bank that showed that Britain’s net worth had climbed above £10tn for the first time but did not single out the value of land.
The steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to reap the rise in values by allowing them buy land earmarked for development. A growing number of thinktanks and politicians support imposing a tax that would take a slice of rising land values.
A dramatic rise in land values pushed Britain’s wealth to a fresh high of more than £10tn last year, highlighting the huge gains made by developers in property hotspots across the UK.
From London and the home counties to Cambridge and popular parts of Devon and Cornwall, land values have become the single largest element of wealth, dwarfing household wealth locked up in property and financial savings.
Official figures showed that the UK’s net worth rose by £492bn between 2016 and 2017 to £10.2tn, with the lion’s share of the increase accounted for by a £450bn jump in the value of land. The rise continues a trend since 2012 that has pushed the average assets held by each Briton to £155,000, up £6,000 from 2016.
The Office for National Statistics said consistent increases in the value of land meant it accounted for 51% of the UK’s net worth in 2016, higher than any other G7 country that produces similar statistics. In France, which has a land mass twice the size of the UK, land values account for 41% of wealth while in Germany they account for only 26%.
This week several landowners have outlined plans for developments, including the Duke of Westminster’s Grosvenor Group, which said it was taking a growing interest in residential property outside central London. It said it would build thousands of homes on greenfield sites around Oxford and Cambridge, which are to benefit from Treasury plans to connect the two university towns with a cross-country rail link.
Analysts said much of the increase in land values was in response to Britain’s rising population, which has put pressure on the government to back house builders seeking to develop green field sites and farmland in south-east England and other development hotspots around the country.
The price of farmland can increase by 100 times when developers succeed in persuading ministers to redesignate it for housing. Areas of London that were previously derelict, especially in the east of the capital, have seen huge rises in values as regeneration efforts and improved transport links have fed into property prices.
Commercial property has also enjoyed an upswing in value since Britain’s recovery following the 2008 banking crash, more than offsetting recent declines in much of the retail sector.
The ONS figures go beyond a study last year by Lloyds bank that showed that Britain’s net worth had climbed above £10tn for the first time but did not single out the value of land.
The steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to reap the rise in values by allowing them buy land earmarked for development. A growing number of thinktanks and politicians support imposing a tax that would take a slice of rising land values.
The Institute for Fiscal Studies has urged the Treasury to develop a scheme, while the Green party co-leader Caroline Lucas has tabled a private member’s bill proposing a land value tax. Labour said in its 2017 election manifesto that it would consider a similar tax.
Mark Wadsworth, the head of the Campaign for Land Value Taxation, said: “The minority with a vested interest in high land values will no doubt celebrate higher values, saying that is shows the importance of land to the UK economy. In truth, land values are not a net addition to national wealth, they merely represent the benefits that accrue to landowners because of government spending on public services funded out of general taxation; land values are actually just a measure of ongoing transfers of wealth from taxpayers to landowners and a zero-sum game.”
UK's wealth rises as land values soar by £450bn in a year | Business | The Guardian
The Campaign for Land Value Taxation has got some very interesting ideas:
Land rent for public revenue
What is LVT?
And these ideas are becoming so mainstream that even estate agents are taking note:
Nine radical ways to reform the land market
August 28, 2018 / Isla MacFarlane
The Progressive Policy Think Tank has called for an urgent reform of the land market, citing figures which suggest a plot of land now accounts for 70% of a property’s value.Land is an essential factor in all economic activity but, if it is not properly managed and regulated, it can play a destabilising role in the housing market and the wider economy, the left-leaning think tank said in a recent report.
The UK’s dysfunctional land market and soaring land values have helped drive growing wealth inequality, create the conditions for a broken housing market, and are a root cause of an unproductive and unstable economy, it claimed.
If that isn’t enough to convince you, it even quotes Winston Churchill, who once said that a landowner “renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.”
Reform of the land market must therefore be focused on reducing the financial speculation that occurs in land and sharing the benefits of increases in land values for the benefit of the public good, the report concludes. It suggests:
> The government should reform compulsory purchase laws to allow local authorities and public bodies to buy land at a fair value that enables the delivery of high quality development.
> The government should give planning authorities in England the powers to ‘zone’ areas of land for development and freeze its price close to its current use value, as happens in Germany.
> The fire-sale of public land to the highest bidder should be ended. Public land should instead be prioritised for the delivery of genuinely affordable and high-quality developments.
> The cap on local authority borrowing to finance housebuilding in England should be abolished.
> The government should exempt borrowing for council housing under its measure for calculating UK debt, bringing the country in line with the accepted international criteria which does not include council housebuilding.
> Government should set new guidelines in England for the minimum proportion of new housing developments which must be genuinely affordable.
> The government should introduce an annual property tax to replace council tax and eventually stamp duty.
> The government should introduce a land value tax to replace business rates. > A land value tax on business land would be the most economically efficient means of taxing commercial land. It would support, rather than deter, productive investment; it would capture some of the unearned windfalls from the ownership of land; and it would reduce incentives for further speculation
> The government should reform macroprudential policy, both to counter systemic risk and limit house price inflation.
“The proposals set out in this paper for regulating our land and housing market, and for a more progressive taxation system focused on land, are a first step in ensuring that the unearned ‘economic rents’ which arise from landownership are shared for the public good,” the report said. “Our proposals will reduce speculation in land, lead to a decrease in wealth inequality, and allow for a greater focus on productive economic investment.
“They will also help to create a better-functioning housing market, capable of delivering the number of homes we need to meet demand, particularly genuinely affordable homes. Together, our proposals will make for a stronger, more just and prosperous economy.”
Nine radical proposals to reshape the land market - showhouse.co.uk
.
.
.
> The government should give planning authorities in England the powers to ‘zone’ areas of land for development and freeze its price close to its current use value, as happens in Germany.
> The fire-sale of public land to the highest bidder should be ended. Public land should instead be prioritised for the delivery of genuinely affordable and high-quality developments.
> The cap on local authority borrowing to finance housebuilding in England should be abolished.
> The government should exempt borrowing for council housing under its measure for calculating UK debt, bringing the country in line with the accepted international criteria which does not include council housebuilding.
> Government should set new guidelines in England for the minimum proportion of new housing developments which must be genuinely affordable.
> The government should introduce an annual property tax to replace council tax and eventually stamp duty.
> The government should introduce a land value tax to replace business rates. > A land value tax on business land would be the most economically efficient means of taxing commercial land. It would support, rather than deter, productive investment; it would capture some of the unearned windfalls from the ownership of land; and it would reduce incentives for further speculation
> The government should reform macroprudential policy, both to counter systemic risk and limit house price inflation.
“The proposals set out in this paper for regulating our land and housing market, and for a more progressive taxation system focused on land, are a first step in ensuring that the unearned ‘economic rents’ which arise from landownership are shared for the public good,” the report said. “Our proposals will reduce speculation in land, lead to a decrease in wealth inequality, and allow for a greater focus on productive economic investment.
“They will also help to create a better-functioning housing market, capable of delivering the number of homes we need to meet demand, particularly genuinely affordable homes. Together, our proposals will make for a stronger, more just and prosperous economy.”
Nine radical proposals to reshape the land market - showhouse.co.uk
.
.
.
No comments:
Post a Comment