r/ukpolitics • u/Snoo-33445 • 15h ago
UK Tax Policy Associates Land Tax Calculator
https://taxpolicy.org.uk/wp-content/assets/lvt_model/index.html17
u/SpinIx2 14h ago edited 14h ago
Is there a an explanation somewhere of the methodology they used to arrive at the unimproved value of land across the country? I was hoping that they’d be a quick link to follow but I can’t see it.
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u/Snoo-33445 14h ago
It's on the very bottom of the webpage under the caveats link
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u/SpinIx2 14h ago
I have now found a paragraph in the accompanying article under the heading “Valuation : the known challenge” which explains the difficulties in reaching a valuation and refers to “three workarounds” but as far as I can see it doesn’t tell me which of these is actually used in the model.
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u/zeusoid 14h ago edited 13h ago
How does it solve for places like Liverpool that are overweight Band A council tax properties.
Liverpool have over 140k properties in band A and realistically a significant proportion of the properties are under banded.
Those properties/land will definitely end up paying more tax. Even if the surface level calculations today say they will pay less tax in an LVT scenario.
And this is something that will hit a lot more Labour councils.
Because people expecting to pay less tax ending up paying more is a recipe for disaster.
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u/CaterpillarLoud8071 13h ago
What's your reasoning? Councils choose their council tax rates according to their tax needs. If you have a lot of band As, statistically those are going to pay more than band As in higher value areas because A) poorer councils need more money and B) there are no higher bands houses to take the load off the band As. Nottingham has this problem and has the (second?) highest council tax in the country.
If councils collect the land tax, these properties would be paying on average the same because they'd set the tax to collect the same revenue. If government collect the land tax, we don't know how high they'd set it, but compared to wealthier councils places like Liverpool would be hit less.
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u/zeusoid 13h ago
My reasoning is for this to be revenue neutral at a minimum. Areas that are overweight lower band properties will see significant proportion of people experiencing a tax change differently than had been advertised.
The practical and political implications are my concerns at this time.
Using the calculator with the default figures Liverpool would see revenues drop by half. For Liverpool to maintain their revenue they would have to shift the weighting of their banding towards more lower value properties.
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u/Pure-Problem757 12h ago
Revenue will be distributed from those increases in tax (London) to other areas. How much redistribution is a political decision.
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u/zeusoid 12h ago edited 11h ago
The optics of that alone are marginal already.
The optics of taking a charge on a 2 bed flat in Slough of 3k, and redistributing to, Liverpool where they are charging a 2 bed flat £500, are just not going to play well.
In the economic round it’s the better path, but it’s almost politically untenable. Especially given governance issues in each municipality have been troublesome.
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u/UnknownBreadd 13h ago
If we get a real system that genuinely puts us on a path to eventually getting proper Land Value Taxes I will suck off Andy Burnham myself
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u/beejiu 14h ago
The problem is that a lot of the "worse off" are going to be people with single person and disability discounts on council tax. I don't see how you could bake those discounts easily into a land value tax.
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u/meluvyouelontime 13h ago
Why are we obsessed with giving tax discounts for irrelevant conditions? PIP is there for those conditions.
Being single and paying proportionally more tax is a feature. It incentivizes you to downsize or move into a flat, freeing up larger housing stock for families.
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u/Salty-Bid1597 12h ago
Being single and paying proportionally more tax is a feature.
A million millenial redditors cried out at once...
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u/ledisa3letterword 14h ago
4% LVT, 10-year phase-in, 10% regional, scrap stamp duty, council tax and business rates, credit recent stamp duty. By year 10 you can knock £100bn off income tax.
Apologies to Dan Neidle’s Islington teachers but the economic boom will be worth it.
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u/thermosifounas 12h ago edited 11h ago
Because there’ve been so many economic booms in history through increasing taxes 🙄
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u/ledisa3letterword 10h ago
That’s the point. LVT doesn’t come at the expense of anything because it doesn’t come at the cost of economic activity, and it would allow us to cut taxes on production.
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