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?

It's intended to get people to sell off their gardens for development. Which may not be legally the same as green belt. But which would have the same visual effect - boxy new houses built on the cheap and crammed onto plots where they don't quite fit. There's one near my dad where they have converted their garage into a 1 bed house. It looks awful, absolutely awful. They're now trying to flog the main house, and the price tumbles by the week. Because nobody wants to have their neighbours living on their driveway, oddly enough.

How about some decent incentives to clean up brown land and build quality affordable houses there instead?

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.

Whether it is a very expensive tax or not, and whether the Labour Party really are cynical enough to levy the higher rate vs landlords and pretend they think tenants won't have to pay it, really hinges on details the Labour Party haven't released yet.

Some of the proposals that can be found online result in some figures that may yes be a bit (as you so snidely put it) "frightening to middle class voters" but are more (for me more worryingl)y extremely expensive for families on modest incomes renting properties with a few bedrooms in places where property prices are higher than they could possibly afford to buy.

No need to snark about people not understanding. We need numbers to understand the potential impact of this policy, if you have those you could simply furnish us with them and persuade us all.

No, it isn't sionella. It really isn't about garden grabbing at all, you are flat wrong. In fact, as an idea it massively predates the thought of using gardens for housing in the way that is now happening in London and the south-east.

There are already lots of incentives for brownfield sites.

It's

Not

A

Policy

Ffs

But Artisan one of the proposals in the draft doc is that the landlord or landowner would be subject to LVT rather than the tenant, but as a business expense it could be offset against tax. So the local council no longer gets Council tax from tenants but does get the LVT, but the Treasury then gets less as the business can offset LVT so there's les in the pot for public services - how does that seem like an equitable exchange?

Let's not forget that this policy is also intent on driving down property prices, which is not a bad thing, but surely as property prices devalue the revenue also drops so services will have to be cut due to a drop in funding.

It's in their manifesto and they want out votes on the strength of that manifesto, and it's something people are querying.

A footnote saying "lol I had my fingers crossed!" might make it all great if you're With Corbyn (or May, for that matter), and a manifesto may be an outline, but this needs clarification because for some of us votes will hinge on it.

We'll see, lan.

meg - If you are in those circumstances, this is likely to help you far more than the current system does. One likely effect of LVT is that it gradually reduces both rents and house prices.

The argument goes something like this: renters are exempt from LVT and would no longer pay council tax. Furthermore, in the housing market as a whole, the intention is to get land into use, which means more homes. And where there is more supply, prices tend to go downwards. Not only could it reduce housing prices and rental costs, it could be a solution for people who simply can't get onto the ladder at all right now.

funny how labourites do not like it when someone questions what is in their manifesto (if they are not going to consider doing it - why is it in the manifesto?) and rush to defend it. Talk about hypocrisy and smearing when they have been all about the dementia tax and everything else in the last few weeks.
Are they really so blind that they cannot see that labour's largesse has to be PAID for?

A Labour government will give local government extra funding next year. 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.

This is what the manifesto says, we will initiate a review, not we will bring in a land value tax with some made up figures that the Telegraph plucked from an obscure document from an unrelated organisation.

Omfg

It's not a policy. Both parties have policies on their manifestos, those are the things where they say 'we will'. Like labour say they will not raise taxes for people earning under £80k. That's a controversial one. Same as the conservative social care policy. They say 'we will'.

In contrast, this is what the labour manifesto says re lvt. Of 124 pages there is this sentence:

'We will initiate a review into reforming council tax and business rates and consider new options such as land value tax'

Does that sound like a policy?

"Are they really so blind that they cannot see that labour's largesse has to be PAID for? "

Er.... that's EXACTLY what LVT is intended to do!!

We all know money is needed: the question is how to distribute the bill fairly.

This is quite a good movie on the issue. It was crowdfunded.

reetgood yes and we all know that a review will come with the options worse case, no option or best case just like any business case when your looking to change something. If the best case is LVT then its more than likley to be introduced. They want to reform council tax that is clear enough and they could of left it at that but they mention LVT specifically so clearly this is enough for me to know thats their favoured option. Its the same at work, people want to change something we do an option review to build a business case but the first thing the person in charge says is I want a review in to x y z to look at options like A, than A is all they focus on and make their case for A.

Today's Times says the 0.85% rate would be introductory - it would rise over a 10-20 year transition period to 3%. If that's just not true I should like tomknow.

What I'd like to know is, who'd be responsible for working out how much your land, or in most cases, small residential plot, would be worth. A new army of surveyors/council jobsworths? A nice little earner for estate agents?

It isn't not true, it's not a policy. No one has worked it out yet.

Here is one proposal for how valuations could work: 'It would not be necessary to value individual homes, as LVT ignores the cost/value of buildings and improvements.
In each post-code sector (‘LS’ = area, ‘LS28’ = district, ‘LS 28 5’ =
sector and ‘LS28 5PZ’ = unit) there are about three thousand
properties, five or ten per cent of which are sold each year, which
would give a fair sample of a couple of hundred actual sales each year
in each sector. HM Land Registry already records selling prices and
knows plot sizes, so all that is required is to report rebuild costs
(using the ABI calculator, for example) on the TR1 form when a property
is sold. HM Land Registry would deduct this from the selling price, add
up the residual values of all sites sold in each sector, divide the
total by the total area of all the sites sold in each sector to arrive
at an up-to-date value per square yard for each sector, to be updated
at least annually.

And do not forget the huge administrative cost savings that could be
achieved by scrapping all the other taxes that LVT could and should
replace! '
Source : Conservative Home. Article by Mark Wadsworth in 2008.

It may or may not work, there would be a lot to resolve, but all the parties are looking at this, some more openly than others.

FGS RTFT. How many times do we have to explain how baseless all the figures connected with this ridiculous smear of a story are? Conservative press office must be absolutely desperate about their sliding lead in the polls. The newspapers are a disgrace for reporting it as they have, but hey, who is surprised by the low quality of our media these days?

Whoever said Labourland has nothing to do with Labour is wrong, some of their members are members of the British Labour Party. So there is a connection between them.

This is from their website:

The Labour Land Campaign advocates a more equitable distribution of the Land Values that are created by the whole community. We are a voluntary group working for land reform within the Labour Movement. Our members are members of the British Labour Party, Trade Unions and Cooperatives, or are individuals who support our aim to share land wealth through Land Value Taxation.

It is actually an excellent idea and even Churchill was a big fan (that is how old the idea is!).

It would mean a) that we could get rid of loads of other unfair taxes like business rates and council tax b) it would reduce house prices and make them more affordable since it is a tax on land value c) it would mean land is used more wisely and that all the land hogging builders would be forced to pay if they don't use the land and any uplift in land prices means more LVT paid, d) it would mean all the rich landowners who have owned the land (originally got via theft) hundreds or thousands of years ago, would have to pay. At the moment they pay no tax but charge lots in terms of leasehold and rents for other to use the land.

It is actually a really fair tax. Lets also not forget that most people did not pay what their house is now worth and has increased in value without them doing anything. They have basically had a huge tax free gain. LVT would rebalance this generational unfairness.

@metspengler

Bloody hell

^^

Exactly

They are only considering to replace council tax with LVT not income tax or VAT etc. so it doesn't really fill me with great hope

At the moment they pay no tax but charge lots in terms of leasehold and rents for other to use the land.
And after LVT they will be charging even more in terms of rent to recover the LVT they have to pay.

I can be doing with not liking an idea, but the wilful misinformation continuing on this thread is really getting on my tits.

Below is what Labour Land also say about themselves - they have a constitution. That means they are a separate organisation. Their vice chair is a member of the green party. www.labourland.org/officers/

It's like saying the TaxPayer's alliance are affiliated with the Conservative Party, because their Chairman was a member of the conservative party.

'The Labour Land Campaign was started in 1983 by a group of people concerned with the future of our planet.

They brought together a mixture of skills: architecture, land economics, farming, town/urban/community/city farms, workers, trade unionists, academics, researchers, smallholders, town planning and protesters.

The Campaign has advised governments and others on the correct use of land. They have objected to unsuitable legislation and unsightly, ecologically damaging developments and encouraged developers to consider the needs of the whole community and not just those with a financial vested interest.

The Campaign has helped promote parliamentary legislation, lobbied politicians and policy-makers, advised landowners, business and property companies, supported national and international campaigns on poverty, unemployment, equality, green issues and justice.'

Its not misinformation to quote them from their website that their members (some of) are also members of the Labour Party.

Its naiv to think that they won't use their position within the Labour PArty to push forward the idea.

It's intended to get people to sell off their gardens for development

LVT is levied on the maximum potential value of the land with whatever planning permission it has. Gardens are unlikely to gain planning permission for building houses so this is not correct.

How about some decent incentives to clean up brown land and build quality affordable houses there instead?

LVT would do exactly this. Whoever owns the land would be taxed on the maximum value of the land, so assuming planning permission for the site allowed building, they would be taxed on the value of the land as if it were built on, even if it is not built on. This is a powerful incentive for the landowner to, in your example, build on their brownfield site.

Most of those objecting to this alleged proposal seem to have very little idea of what LVT actually is

What is their position in the Labour party? this is a list of affiliated organisations with the Labour party. www.labour.org.uk/pages/affiliated-organisations I don't see Labour Land on there.

They are a separately constituted organisation. I don't know how many times I can say this.