How to put land to good use
Mick Kenny’s nostaliga for land nationalisation (M Star February 24) and rejection of a land value tax (LVT) is not rational.
Land’s unique quality is that it cannot be manufactured but can be used continuously without wearing out.
Therefore, we must never waste it, but this is what we do, because there is no cost to holding land out of use.
An annual land value tax would encourage owners to use land to best advantage. We would all benefit from the revenues raised as well as the availability of good development.
If the state owned all the land, how would the level of rents be determined?
In the Soviet Union, similarly built city flats were let for similar rents, but those in the best locations could be relet at premium rates, for the benefit of those in control.
This is inevitable. Do we want to encourage such corruption?
Better to let the market determine the rental value of land and scoop up the huge tax receipts for the benefit of al. With ownership and market value of all land in the public domain – a prerequisite for LVT – avoidance and corruption can be minimised.
Another advatage is that the higher the rate of LVT, the lower the price of land, so councils could afford to buy plenty of cheap land for council houses, land prices being the most significant cost of providing new housing.
It’s all very well to advocate what should be done with unused nationalised land – build coucil houses – but what’s to be done with the land currently occupied by the 70 percent of homeowners?
Current land values could represent as much as 25-30 per cent of UK total wealth. An annual 100 per cent land value tax would equate to land nationalisation without any unpleasant hint of the necessity for compensation to landowners.
A rose by any other name.