Column B is the value of housing in each region taken from Savills by one billion pounds
Column C is A divided by B to give an approximate average house price by one thousand pounds
Column D is C minus the average capital value of a dwelling assumed to be £80K giving the site only value
Column E is A multiplied by D to give the value of land in each region.
Column F is percentage of the total value of land in the UK (£3994bn) for each region
Firstly this is just a bit of fun so don't take the figures too seriously, they are just back of a fag packet. I'm just trying to show how in principle the percentage of total land values for each region of the UK can be worked out. However, they are going to look something like the above.
Secondly, while the capital value of housing in London/SE might be higher than elsewhere, on the other hand they pay around 70% of all SDLT receipts. I would imagine its similar for Capital Gains and Inheritance Tax. So for the purposes of keeping things simple I'm going to assume they cancel each other out. Futhermore London has the second highest number of second homes in the UK, especially in high value areas. So that would tend to make C higher, but wouldn't necessarily effect F.
Right, with those caveats out of the way lets discuss why this could be a good ruse. I think that in principle most people would agree that our property taxes are a bit of a mess and need tidying up. A Land Value Tax would be the best option, but you've got to get past the "army of surveyors" argument "tax on gardens" etc, etc. One possible way around this is simply to calculate each regions share of whatever amount revenue you are trying to raise, based on the formula above. We could call it a "commonwealth fee" paid into the "commonwealth fund", from which each region would get an equal per capita share. Then leave it up to them on how they want to raise it.
Say we want to scrape Council Tax, SDLT, CGT and IHT we'd need about £55bn. London would be billed £18.5bn and get back £6.6bn. The current grants given to each council would decrease on this basis.
But we don't have to stick at £55bn. The current rental value of land under homes in the UK is around £200bn pa so in theory the "commonwealth fund" could raise and re-distribute upto that figure. As that would essentially level the playing field between the regions, I think they could just get on with it and raise the fee by which ever way they feel best. A bit of tax competition would be good. Of course we'd all advise them to do an LVT along the lines of Mark's submission to the Scottish tax commission but others might prefer VAT.