The FT published Carol's riposte to Landed Gent today (for my attempt, see here):
Sir, N B B. Davie-Thornhill states (Letters, April 12) that the cost of maintenance of the landscape of the estate which he owns in a National Park is considerably more than the potential income. Thus the imputed rent to which Roger Sandilands refers (Letters, April 6), and which he believes should be paid to the community, must be negative.
If this were true, then far from estate owners having to pay for the privilege of beneficial ownership of large swathes of our countryside, we should be paying them. I wonder if we could set up a few “test” auctions of these estates to see if they have any value at all.
Carol Wilcox, Secretary, Labour Land Campaign.
I suppose Landed Gent will then claim that "Yes, my estate is worth an absolute fortune, but only because of all the hard work I've put into trimming the hedges over the years". Maybe it will turn out it's all agricultural land which he farms himself, so the tax would be £nil anyway, we don't have enough detail to go on.
Going nuts
1 hour ago
10 comments:
Just one point on something you often mention - that agricultural land is £x/acre, and you use that as a base price to compare land with planning permission.
Surely agricultural land is 'improved' and therefore its price includes the value of said improvements. It will be fenced, and drained, and the soil regularly fertilised, and generally in regular use.
For pure locational value you would have to exclude all those farming improvements, and find some land that is in a natural state (ie covered in trees and scrub, no fences, undrained and covered in rocks) and see what its value is. The UK farming landscape is the product of hundreds of years of human endeavour. It didn't just get like that naturally.
Sobers. Yep. I've wondered about that. If you apply the 'land has a value because of the existence of the State' then it agri land might also be subject to LVT. Agri land round here is, I think, about £3K to £5 per acre so LVT at 8% would be £24 to £40 per acre per year. I don't see that this is unreasonable.
S: "For pure locational value [of farm land] you would have to exclude all those farming improvements, and find some land that is in a natural state (i.e. covered in trees and scrub, no fences, undrained and covered in rocks) and see what its value is. "
I think we are agreed that the answer would be 'so low as to not be worth taxing' but that would be one approach to finding out the LOCATION value.
The other way would be to compare physically identical fields in e.g. Shetland Islands and Kent and look at the difference in rent which you could collect (because if you're in Kent you have better access to more customers), I imagine the difference would be small (£20 an acre? £40 an acre?).
L, the 8% rule of thumb applies to residential and urban. Farm rents are between £20 and £100 an acre, depending what and where (£3k x 8% = £240, not £24).
Ironically you can get more rent for some land in the cheaper areas than you can in the expensive ones. For example good grazing land in Wales for example sells for c.£5K/acre and can be rented out for £100+/acre. Whereas similar land in southern England would be valued at £7-8K but only worth perhaps £50-60/acre to rent. Its because the rent is a function of commercial farming, and Wales is a livestock area, so demand for extra grass is always high. Whereas southern England is more arable these days and not much livestock, plus there are lots of non-farming landowners who want the nice house, but don't want to farm the land, so rent it out, increasing supply.
Good arable land anywhere makes anything from £50-150/acre, depending on the price of grain. Currently due to high prices people are bidding up to £200/acre to rent arable land but I think that's a bit OTT.
S, and then there is a quirk that farm land in Northern Ireland sells for more than anywhere else.
Suffice to say, Adam Smith saw no pressing need to tax farm land, because (a) rental values are so low compared to urban or residential land and (b) although the gross rental value is known, it is very tricky to split that up into the rental value of the physical improvements (not taxable) and the 'location' value (close to markets = higher rental value) and the land in its natural state (the 'free gift of nature' argument).
And I've come to the same conclusion as Adam Smith.
The reason I contrast values of farmland with urban/residential land is merely to illustrate the vast gap, which is clearly down to location value and nothing else.
Whether we compare £100,000 rent/acre for urban/residential with £150 rent/acre for farmland or with £50/acre for farmland is neither here nor there.
"Carol Wilcox, Secretary, Labour Land Campaign."
What I don't understand is how Labour can be SO SHIT when they clearly have free thinking sensible members such as Carol Wilcox. For all the posturing of the mainstream section of the Labour party in respect of the increased personal allowance not really being helpful because "what about the people that don't even earn £10k" The Labour land campaign STILL have as their "1st step" policy to introduce LVT and up the personal allowance to £20k!! They would perhaps further their campaign by talking about welfare reform in a similar manner to how UKIP welfare reform policy exists and linking the 2.
SW, Labour are provenly shit because their leaders and those who wanted to be elected MPs decided long ago that if they tap into Home-Owner-Ism, they can stay in power for ever.
It wasn't until house prices started falling that they got voted out again, and now it's the Lib-Cons' turn to try and make house prices go up even further.
PS, nearly all Land Value Taxers also believe in Citizen's Income; the converse is not true.
I remain utterly staggered at what Gordon Brown did in the name of "socialism". In addition to plugging into "homeownerism" he bankrupted us by driving the economy with increased personal debt rather than output. Then despite wasting money in attempted redistribution through the benefit system he is left wondering why the gap between rich and poor has increased and there are now fewer actual home owners than when he started. My local MP is Labour and I have pointed him towards Labour land campaign, I'm not holding my breath...
An interesting twist is that former agricultural land used to satisfy the Milliband-Huhne windmill fetish will command a higher value and, presumably, would face heftier LVT.
In principle we could get some of the absurd subsidy back.
Yes yes, I know, of course we won't get any of the subsidy back it will just be a glorified form of tax credits - charge more tax then give more back in increased subsidy after spending vast sums shuffling paper. But you can't stop a fat man dreaming there might, after all, be something in this LVT stuff.
TFB, it only commands a higher value as long as windmills make a cash profit, either because they are so efficient or because of the subsidies.
Clearly, the subsidies are subsidies to land ownership, so they'd be scrapped in an LVT world. Whether the owners of windmills then take them down again or not is an interesting question.
Post a Comment