LVT - a really bad idea?

[usernamealreadytaken]

The New Poll Tax - from the Labour Manifesto

"We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term."

The suggestion is that the LVT would be around 3%pa. That gives a very real possibility of some in the South East being liable for bills of in excess of £9000-£15000 per year or more, for living in fairly modest homes. That's pretty much a NMW worker's entire salary in LVT. I also read that pensioners would be exempt. Given that a great number of those with large houses and gardens are likely to be pensioners, isn't this really just a tax on ordinary people who can least afford it?

Imho the problem with Teresa may's cap on social care was that the day before senior cabinet ministers had been doing the tv rounds saying that there was absolutely no prospect of a cap under any circumstances whatsoever.

That's what looks slightly weak and unstable.

Reet the figures are from the proposal document on the Labour Land website and it proposes that the 0.85% would be an introductory concessionary rate to be raised to the full 3% rate within an agreed timeframe.

That's not the labour manifesto then, is it?

Just for clarification, the 'agreed timeframe' referred to by labour land is 10-20 years.

Labourland are an independent organisation to the Labour Party. They have officers and a constitution of their own. Your statement is saying that this is in the labour manifesto. That is objectively untrue.

"I don't see anything about a 3% rate"

So they're going to name-check the proposed tax in their manifesto, but there's no reason to go and look up the proposals of it and use them to see what is being proposed? We should just pretend to ourselves it definitely won't work that way?

Oh well, better vote for tenants to have 3% of the capital value of their rented property recovered as rent then, and to devastate farming and depress the property market/construction industry then, just in case it isn't .85% standard, 3% higher. JUST IN CASE it is better than that when we hear the details.

As for "not payable by tenants but by the landowner" where the bloody hell do people think taxes on rental properties are recovered from then, the moon? Typical Corbyn dreamworld nonsense with (once again typical) ordinary families picking up the shortfall between the fantasy and the reality.

Bloody hell.

FGS, how many times does the same thing have to be explained? Labour Land are a totally separate group!! They have nothing to do with the Labour manifesto, page 86 of which simply says that a land value tax will be CONSIDERED.

Land value tax is NOT a new idea. The concept is decades old! You will find all sorts of past Labour figures calling for it, on all kinds of different terms, with several sets of figures attached. For example, there's one from Ed Balls where he suggests it should be banded and that only people in £2-3 million pound houses who will be paying £3k a year. (Which is totally unlike the Telegraph's completely irresponsible reporting of this one sentence). Judging by the income tax proposals, which only hit those on £80k or above, it's extremely unlikely that any but the wealthiest will face an additional levy - most people will benefit from the additional revenue going to schools and hospitals.

Can we PLEASE stop doing the Daily Mail's job for them?!

Just to point out that it isn't the capital value of the rented property which would be assessed. It is the unimproved value of the land of which that property sits. As a general rule about 50% of the value of the house.

This in many cases will be lower than council tax, which it is expected to replace.

E.g. Average house price £300000. Land value £150,000. 0.85% of 150,000 £1275 per year. This is lower than a lot of current council tax bands - it equates to about a band c in Birmingham.

If this was adopted and a landowner upped the rent by the LVT the tenant wouldn't be paying council tax too. However, the landowner would have to keep paying in the event of voids.

"Unimproved land" - so fuck biodiversity, fuck agriculture, fuck the green bits that make the uk so attractive, then. What did John Prescott say - "green belt is a labour policy and we intend to build on it"!!

If people are going to take this new Labour Poll Tax well, they are going to have to come out with some figures, I'm sorry.

There are big swathes of the southeast where the locals earn (substantially) below the national average and the properties are sought after by commuters etc. so of high value.

For a family renting in some rural parts of the SE, you could arrive at a sizeable proportion of a low-paid workers annual salary given the documents linked here (as in, a third of salary). This could amount to financial ruin or millions leaning so heavily on the state as to basically be on income support.

There needs to be some direct, factual clarification from Labour. Expecting people to vote Labour on faith without it is great if you're already on the Labour Kool-Aid, but for the rest of us, that Labour needs to win, faith is not necessarily enough.

(the same applies to the Conservative Party by the way)

@metspengler ah it's P.86, not p.88. 'We will initiate a review and consider new options such as a land value tax'

Terrifying. Definitely worth having an outrage over.

F. F. S

They will CONSIDER lvt after REVIEW.

That's basically as non commital as you can get. But sure, get outraged because an article told you to.

Would this be based on land worth or property values because we've put a lot of effort into our house and this would (based on the 3% of total value) make us liable for something like £9k let annum! That's almost my entire business revenue 😱

Jesus wept. It's not a policy. It's something they are saying they will consider. Not that they will do. They might review and decide another system is better.

"Average house price £300000. Land value £150,000. 0.85% of 150,000 £1275 per year. This is lower than a lot of current council tax bands - it equates to about a band c in Birmingham. "

and if you are renting does this mean there will be 3% to be (nudge nudge wink wink ho ho ho) "payable by the landowner not you" .

Because that does actually mean it will be paid by the tenants in the end, obviously.

Sorry just read more of the thread and got more of a ghist of it. Still even based on land values etc it's definitely a leap in costs for many if it's considered.

Met - it's not as simple as that. Most economists - including neoclassical folks like Friedman and Samuelson argue that LVT will actually lower rents, because the way it is usually set up means it is intended to fall most heavily on those with empty, unused land. The effect of LVT is intended to release land for building, creating supply which reduces price.

Check out this blog, which answers in more depth: kaalvtn.blogspot.co.uk/2013/01/g-lvt-would-benefit-rich-and-hurt-poor.html#1

(Waits to see everyone repeating the same argument over and over anyway).

The suggestion by WHOM?

There was a beautiful article in the Telegraph brimming with completely invented figures and highly detailed speculation, with the single line at the bottom:

"A Labour spokesman said: 'This is desperate nonsense from the Tories. Labour has no such plans.'"

I can't believe anyone would be surprised at a labour government increasing taxes every which way, year after year.

The whole point is that it is something which they would study and think about. There are no figures yet. It might work. It might not. But the studies which have been done suggest that it has the potential to calm overheating house prices and stop developer landbanking and potentially cut other taxes.

It seems to me at least that it is completely appropriate to study it. It would be even better if it was a cross party study, but given the politics with every fucking thing that's not going to happen.

For example, should agricultural land be exempt. Some studies say yes, others not. What about land owned by charities and should this differ depending on whether it's the National Trust or the Grosvenor Estate.

All the factors should be considered, but it should be considered and not just dismissed because it doesn't work for Lord Rothermere or Rupert Murdoch, because the system that works so well for them doesn't work for millions of others.

Yes Met. Once again, the proposal is that LVT would be instead of council tax which is currently paid by tenants.

Whether to increase it would be a political decision, just like deciding whether to increase council tax.

Terrifying. Definitely worth having an outrage over.

Oh right, so if they put this noncommittal disclaimer there we should ignore anything we don't like that Mr Corbyn's Labour Party offers and just vote as if it won't happen.

It's funny, because I have heard just the same kind of noncommittal disclaimer from the other side about social care described as a reason to vote Labour, as a u-turn, as lies to fool sheep into voting for them when they intend to implement the "dementia tax" anyway. Frankly what's sauce for the goose is sauce for the gander.

As much as I don't like dementia tax, LVT seems like it could be a 21st century poll tax, ruin families, crush their aspirations or potentially even force them to move.

We need sufficient facts so that we can all calculate roughly what it would cost our households, personally I can't vote for Labour on the basis it "might be ok".

This is a smear. It's a smear by the Tories, who have unearthed something that looks frightening to middle class voters who don't have even the most basic grasp of economics, from the depths of a dusty old Labour Land document that has nothing to do with Corbyn's campaign. The press have proceeded to embellish it using imaginary examples that are completely unbanded (i.e. the % paid is the same whether a house is worth £100k or £10m - hard to imagine any Labour government agreeing with that) and that pay no regard to differences in the values of agricultural land and land with planning permission.

This has nothing to do with the green belt protections either. There are no proposals here to dismantle the planning system.

reetgood so your not outraged then about the social care policy from TM because they will be consulting on the cap. So nothing to get outraged about either.