Dinero left a comment on Killer Arguments Against LVT, Not (415):
The land under gardens has a lower land value than the land under houses as it does not have planning permission and is to small to build a house on.
Me: Exactly. Two similar houses on the same street with different sized back gardens hardly differ in value.
Dinero: So there is an issue with existing houses where a tax on the land that is not big enough for housing and does not have planning permission for housing is at the same rate that land that does.
A terraced house with a strip of garden at the back would have three times the tax as next door with no garden.
Me: That would be a daft way of doing it.
Dinero: But don't you see that as a problem?
Me: If you have a stupid valuation system, of course it's a problem. So have one that reflects actual rental values. Duh.
Din: But that is the proposal , the proposal in the article is to tax the garden area at the same rate as the house area.
Me: That is NOT the proposal. The article is lies from start to finish.
Din: are you sure about that?
From the Labour Land Campaign website
"...First off, the value of every piece of land in this country should be assessed. By 'land' we mean the site alone, not counting any improvements on the site. Thus, the value of any buildings, crops, drainage or anything else which people have put on, or done to, the site would be ignored. Then, after the land has been valued, a tax should be fixed on the basis of that value..."
1. The LLC is not part of the Labour Party and does not dictate official Labour Party policy. That is just Tory propaganda, they thought, we can't criticize Labour's actual proposal (which was very timid) so we'll pretend that LLC's proposal is Labour's proposal and criticize that instead.
2. I am a member of the LLC committee, I help them do their policy proposals and so on and I know perfectly well what they mean. There's no point deliberately misunderstanding them and telling me we that proposed something else.
3. I trust we are agreed that "Two similar houses on the same street with different sized back gardens hardly differ in value." That is simply a true statement of fact.
If you went to the bother of assessing plots individually, then the LVT liabilities on these two houses would also "hardly differ".
Let's apply basic LLC principle to Dinero's hypothetical example of "A terraced house with a strip of garden at the back" vs "next door with no garden." First we would have to find out what the difference in rental value is.
At a guess, the one with the big garden can be rented for £10,000 a year and the one with no garden for £8,000 a year.
Knock off £4,000 bricks and mortar value, the site premium on the first is £6,000 a year and the site premium on the second is £4,000 a year. Whatever rate of LVT you set (nobody said it has to be 100% of assessed value), the LVT on the one with the big back garden would be one-and-a-half times as much as one the one with no garden. Clearly NOT three times as much.
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