In the UK support for LVT can be found in all the major political parties. At the 2015 General Election the LibDems, the Green Party and Co-operative Party all included LVT in their manifestos.
The CEJ has been engaging with a number of figures to promote the idea of using land rent for public revenue. Leading political figures who have been advocating LVT recently include Jeremy Corbyn, Leader of the Labour Party, John McDonnell Lab MP and Shadow Chancellor, Tim Farron Leader of the LibDems MP and Nick Boles Cons MP. Andy Burnham Lab
MP included LVT in his 2015 leadership bid. Senior members of the Green Party, including the leader Natalie Bennett, MP Caroline Lucas, Jenny Jones and MEP and economic spokesperson Molly Scott Cato speak of its advantages.
In February 2016 the Planning Committee of the London Assembly published a report entitled "A Land Value Tax for London" which explored the possibilities of adopting such a tax in the capital and examined in particular how it would improve the housing situation. It received a favourable response from Mayor Sadiq Khan in November and with the release of the London Finance Commission Report in January 2017 the idea was given a further boost by Tom Copley Chair of GLA Housing Committee.
Many think tanks on the left of the political spectrum including the Fabians, CLASS, Compass, and Progress have published literature supporting annual Land Value Tax. From the opposite side of the political spectrum the Institute of Economic Affairs the and Adam Smith Institute also recognise the efficiency of this form of collecting public revenue. The Mirrlees Review, a comprehensive review of the British tax system produced the Institute of Fiscal Studies, explains fully the benefits of shifting taxation onto location values.
The concept of LVT is not new in the UK, and has had significant support over the past century - perhaps the most well known historical advocate being Winston Churchill. Lloyd George,
included a diminished version of LVT in his 1909 People’s Budget and in 1931
the Labour Government included LVT in their Finance Act (see here) but when Ramsay McDonald
formed a National Government with Conservatives, to tackle the economic crisis,
one of their first decisions was to discontinue the land valuation making it
impossible to collect LVT. The 1935 Conservative Government took LVT off the
statute book. Herbert Morrison also
moved a Private Member’s Bill in 1939 calling for the Site Value Rating (local LVT)
of the LCC. In 1985 Tony Benn promoted
a Ten Minute Rule Bill in Parliament calling for “The Common Ownership of Land”
and suggesting the creation of a Community Land Trust to collect land
rent. In 2013, Caroline Lucas, Green MP,
moved a Private Member’s Bill (with Lab and LibDem MPs supporting) calling for
a study of the benefits and practicality of LVT.
In recent times
there has been much discussion in the press about LVT. The Financial Times has carried articles
promoting LVT by Nick Boles (now a Conservative Minister), Sir Sam Brittan and
Martin Wolf. Similarly The Guardian, The
New Statesman, The Economist, Tribune and other publications have published
articles supporting LVT by George Monbiot (environmentalist), Andy Wightman
(Scottish land reform campaigner and now MSP representing the Scottish Green Party), Richard Murphy (Tax Research UK), Will Hutton
(political economist and former Chief Exec of The Work Foundation), Merryn
Somerset Webb (Editor of Money Week), Phillippe Legrain (economist and author),
Larry Elliott (The Guardian’s Economics Editor) and Polly Toynbee (journalist
and former BBC Social Affairs Editor).
The OECD, The
World Bank, UN Habitat and other international organisations have drawn
attention to the benefits to be gained from adopting LVT.
Commitments to implementing LVT can be found in the manifestos of these three major political parties:-
Liberal Democrat Manifesto, Page 26
Liberal Democrats remain committed to introducing
Land Value Tax (LVT), which would replace Business Rates in
the longer term and could enable the reduction or abolition of
other taxes. We will extend the Business Rates review to ensure
it considers the implementation of LVT, as well as interim reforms
like Site Value Rating that could be completed within five years.
We will charge the Land Registry with completing registration of
all substantial land and property holdings in England and Wales by
Co-operative Party Manifesto [a subsidiary of the Labour Party with 28 MPs and 16 Lords], Page 21
A significant cause of this has been the rising
cost of residential land. As economic growth has
occurred, this has led to inflationary pressures
on the prices of residential land in scarce supply,
or restricted in the places where everyone wants
or needs to be. There is nothing new in all of this. The last 200 years have seen regular 15-20-
year cycles of economic growth and recession
that have brought rapid uplift in land values, and
ended in their implosion.
A Land Value Tax could make a significant
contribution to stability within the property
market. It would act as a real incentive for
people who are sitting on empty banks of land
to develop it, building the new homes we need
and kick-starting the economy in the process.
It would ensure that when landowners benefit
from investment by others in an area, they pay
back a fair share. Devised carefully, it would
demand a greater contribution from the wealthy
– not least the international elite with their
mansions in London – without affecting ordinary homeowners. And it would be one tax that the
rich and powerful could not dodge.
While this would be a new method of taxation
in the UK, countries such as Denmark, Hong
Kong and Taiwan utilise land values to help
their economies. Local Authorities in parts of
Australia, New Zealand and North America
have also all adopted local forms of land value
taxation. There they have not only improved
economic stability but also stimulated
investment in more productive elements of their
The government should replace business rates
and stamp duty land tax, with a land value tax.
This should be applicable to all land with the
exception of land with an occupied primary
residence on it. This would mean that land
value taxes on empty homes would supplement
council tax, which would be an added incentive
for empty properties to be occupied or sold. It
would also leave the vast majority of all UK land
taxable, ending the perverse tax advantages that
landowners currently enjoy over occupiers.
The Green Party Manifesto, Page 15
Land Value Tax
Land Value Tax is a system of local taxation where the landowner pays a proportion of the rental value of the land itself, but not of
buildings or improvements upon it, in tax each year. It has many advantages:
• It taxes the value of land and rents, which derive from nature and the efforts of the wider community and not from any effort
by the landowner, rather than taxing wages and profits, which derive from labour and capital;
• It is hard to avoid because land cannot be hidden or moved;
• It dampens speculation in land and land hoarding;
• It favours tenants in particular, since the tax cannot be passed on from the landowner, and would substitute for Council Tax,
which tenants have to pay; and
• It discourages landowners from not using derelict or vacant land.
The land would be valued at the value that could be obtained if sold for the current planning permitted use. Commons, urban
open space, some nature reserves and land used in common such as roads would be exempt. The rate would be set by the local
authority. Special arrangements would allow those with land but a low income to pay their Land Value Tax upon the sale of their
land or upon their death.
A Land Value Tax set at around 2% of total land values would raise about the same amount as Council Tax and Uniform Business
Rate combined. Moreover, 83% of properties would attract lower bills for Land Value Tax than for Council Tax (and many of these
would be paid by the freeholder rather than the tenant).
A number of countries such as Denmark, Hong Kong and Taiwan utilise land values to help their economies. Local Authorities in parts of Australia, New Zealand and North America have all adopted local forms of land value taxation. The map below show countries that have adopted land taxes in various forms with the date of adoption
Source: Dye and England (2009) Land value Taxation: Theory, Evidence and Practice, Cambridge, Ma, Lincoln Institute of Land Policy.