It also means that greedy property developers who sit on empty land in the hope that it will rise in value would be financially discouraged from doing so, and so acts as an incentive to bring neglected waste land back into use. This is the first big advantage of LVT. The second is that money is put back into the community when improvements to an area increase the value of the land. Public investment in transport, health or education services for example can result in huge unearned income for landowners. LVT brings a share of this back to the public purse where the investment came from.
With an LVT of 3.16p in the pound, it would be possible to replace the current Council Tax and Uniform Business Rate, while making sure that wealthy people pay more and poorer people pay less. The figures speak for themselves:
A person in Glasgow who owns a property in Council Tax Band A currently pays £808.67. Under LVT they would pay £541.58, which is a saving of £267.10. Someone in Band B would make a saving of £272.30, Band C would save £212.30, and Band D £98.20.
But we could go further. Setting LVT at 4.39p in the pound would bring in around a £1.5bn more than Council Tax and Business rates currently do each year. This could be used to fund local services, create new opportunities for community groups through a Scottish Land Fund, or in the longer term once the UK Government’s cuts have ended the pressure on the Scottish budget, we could even reduce Scottish income tax to make a permanent shift from taxing work to taxing land. The lowest band properties would still save money against their current Council Tax bill, and LVT’s tendency to reduce housing costs would benefit huge numbers of people.
The full report goes into all the detail. Please get in touch if you’d like a printed copy.