CEJ GENERAL MEETING 22/01/2010:
ISSUES ON IMPLEMENTING LVT’
Henry Law discussed the problems surrounding the fact that LVT is a tax on ‘imputed’ income rather than actual income and put forward a variety of ways to deal with this.
Tommas Graves (standing in for David Triggs) presented a series of arguments for the idea of a ‘Citizen’s Income’ and how this would work with LVT.
Dr Tony Vickers gave an encouraging update on his work on valuation techniques and described how land valuation in the USA presented no difficulty.
Dave Wetzel both entertained and educated with a characteristically colourful and diverse discussion of the relative merits of a local (SVR) and national LVT.
DISCUSSION SESSION BULLET
- Peter Bowman suggested that one way to make a start on
implementation would be to adapt current taxes which are closest to LVT by
moving to land-based valuations.
- Henry Law
took a similar view and said that a ‘backdoor’ approach might be the most
likely to succeed. He suggested making
change “as seamlessly as possible” by introducing minor adjustments with subtle
changes in approach. It should be on the
basis that any changes are revenue neutral to ensure that there are more
winners than losers. “Just say that
valuations will be on land in future.”
- Comments were made about the
idea of a Land Covenant which could collect the economic rent without requiring
the need for registration and valuation. Robin
Smith said this could provide the means of overcoming the persistent
roadblocks to implementing LVT.
Following discussion Members were asked to read up the relevant
documents, obtainable from RS.
- Jerry Jones referred to the current valuation basis of UBR and
Council Tax being on both land and buildings.
- Louanne Tranchell spoke about the implementation timeline, with
particular reference to scheduled re-valuations. We should have a five or ten year plan taking
these critical moments into account.
- Tony Vickers pointed
out that investment managers reviewed their property portfolios at
least every six months and would report to their clients giving a detailed
analysis of price movements which inevitably reflected land value changes. He suggested that perhaps someone in the PLRG
could look into this.
- Meg Howarth said that recent research had shown that the greatest
gap between rich and poor existed between the elderly rich and elderly
poor. She felt exasperated by the high
level of house prices, describing them as ‘obscene’.
- Dave Wetzel
referred to the recent Irish Budget and, in particular, the preceding tax
commission report which had made a good case for a land value tax although it
finally held back from recommending it directly and instead supported the
introduction of a variety of property taxes.
- John Lipetz
mentioned that both the Green Party and the Co-operative Party had produced
reports on taxation which included discussion of LVT and also that Glasgow City
Council had produced a report on local taxation which included a combined land
and property tax and LVT. He enquired
whether ALTER had produced a report on the subject as well.
- Jerry Jones said that it could only be a national LVT that would enable a reduction in other national taxes.
- Tony Vickers
suggested that a pragmatic approach might be to combine the raising of the
income tax threshold with a high ‘homestead allowance’ whilst gradually
introducing LVT in order to make the
process as painless as possible.
- Jerry Jones said that the first step is to get the idea of valuation
based on land established. He referred
to Tony’s talk and asked if Tony could present the fruits of his work in the
form of a leaflet which would be a useful and informative campaigning tool.
- Carol Wilcox
spoke of Heather Wetzel’s work with
the PCS and suggested that they
should be pushing for the valuation of all land through the Land Registry.
- Tony Vickers
made a similar suggestion with regard to the R.I.C.S. In both cases, the incentive would be the
increase in work (for the short term at least).
He said the data and expertise was available.
- Henry Law
proposed that with an eventual significant reduction in property prices as a
consequence of LVT introduction, the nature of the market would change as the
barriers to moving would be less and the market would be livelier. This in itself would make the valuation
- Jerry Jones concurred and said that there would consequently be
an increase in work within the building industry and that this ought to be an
incentive for the unions.
- Louanne Tranchell described the very considerable publicity which was
generated by the council tax reductions in her borough (LBHF). She said that if a council could be persuaded
to support the idea of LVT at a local level, the related publicity could start
a public debate.