From today's FT letters:
So far as business premises are concerned, [The Chancellor] should have reinstated empty rate relief to its previous level so developers can invest in much needed new schemes rather than spending money to maintain properties they struggle to find tenants for – or worse still, demolishing newly built and usable premises simply because a tenant cannot be found immediately.
Robert McNally, Chair, Property and Construction Committee, London Chamber of Commerce and Industry, London EC4
Wot?
They have money to spend on new schemes (for whom they presumably can find tenants) but will demolish these if no new tenant can be found immediately? And they have money for building and demolishing new schemes but none to prevent existing properties falling in to disrepair? Does the bank waive the interest when a property is standing empty? Similarly, a landowner makes a windfall gain when planning permission is granted (however long ago), is it not fair for the council to claw a bit of that uplift back in tax, whether the landowner can be bothered to actually fulfil his side of the bargain? Is he not aware how badly derelict buildings (or indeed eternal building sites) impact on surrounding properties?
As the Land Value Taxers point out, it is stupid to tax buildings, it should only be the site value (or the market value of the planning permission, same thing) that should be taxed, but bloody hell, does that letter make the slightest bit of sense?
Monday 8 September 2008
Er ... and that's a bad thing because?
My latest blogpost: Er ... and that's a bad thing because?Tweet this! Posted by Mark Wadsworth at 19:14
Labels: Business Rates, Economics, FT, Fuckwits, Land Value Tax, Site Value Rating
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7 comments:
Your arguments are getting very persuasive. Or maybe it's the picture of Sarah Palin
How can you tax the land, but not what use it's put too?
I'm not sure you can.
AC1, the value of land = value of planning permission you've been given.
So taxing land value = taxing value of planning permission.
The value of the planning permission is quite distinct to the use to which it's put.
It's like if I rent a hotel room I have something of value (a land value, a right to occupy). If I fail to turn up without cancelling, why should the hotelier give me a refund for not making any use of that 'permission'?
What I mean is how do you get this value?
Do you mean mathematically? In which case land value = value of finished property (plus extra value if you have a licence to run a pub, betting shop etc) minus physical cost of building.
Or do you mean 'How do get planning permission?', in which case the answer is to know somebody on the council or in the planning department.
I covered this on Sunday 20 April (see archive). Land without planning permission is worth diddly squat.
> minus physical cost of building
Inflation adjusted, estimated (by who?) or original?
AC1. An LVT bill would be notional site only land value x % rate.
I agree the actual site only land value can only be estimated to plus/minus 10% or even 20%, but so what? To avoid endless appeals a sensible gummint would always round land values down as far as possible ... and ... just use a higher % rate to arrive at whatever revenues they need to replace as many other taxes as possible.
In terms of keeping land values low and stable, a higher % applied to a low value is better than the other way round.
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