Re: Land Value Tax
When I said tenants pay LVT, I mean that the incidence of the tax falls on them, following the theme of the article.
"I'm willing to pay £x amount to rent this house. That's the market price or whatever. Now government taxes that house. I'm not willing to pay more to rent it. Thus it's the landlord that pays that tax."
In that case corporations pay Corporation Tax, not ordinary people. And VAT. You cannot say that it's the consumer that pays VAT and the landlord that pays LVT: they are the same thing.
There is no "market price" for a home. You need one, and you will pay it or leave, it's a good that has a price elasticity of basically 0, and the price elasticity of supply is not far from 0 either, otherwise we'd see many more houses being built now than twenty years ago given the rise in prices. If the cost of providing the house goes up, so will the rent. The renter will just have to bear it. I mean, this is basic stuff, no? The amounts we are talking about would be thousands of pounds a year, and you can bet that the rent will be going up when that happens.
"The important word in LVT is "land". It's a tax on the value of the plot of land, not what is built upon it. 100 m2 of Mayfair pay the same tax whether there's 50 flats on it or one mansion."
Aha, so it's not property taxes. OK, so my freehold house in Oxford has increased in value by (roughly) £50k in two years. How much of that is down to the land? I know there are estimates for the value of the land, but it would be very interesting to have a governmental value of the land that fluctuates with time. As there are basically no plots of land without houses on them being sold in UK cities, this would be a guess, since there are basically no data points to work to. It sounds not too dissimilar from a more finely banded Council Tax, which we all know and love.
In California, well Los Angeles at least, they have a system whereby your property tax is calculated based on the value of the house when it was last sold. This is obviously ridiculous, and hideously regressive, punishing young people and coddling those with old money.
Biting the hand that feeds IT
