What is Land Value Tax (LVT)?
LVT is a flat rate percentage tax on the value of all land, urban and rural, with no exceptions.
"Value" is what someone would pay for the land if it came on the market.
The value of land is determined by where it is and what it can be used for.
LVT is simple, fair and impossible to avoid - no more tax fiddling!
LVT is not a new tax
LVT may be used to replace existing "regressive" taxes - taxes that result in those with the least paying the highest proportion of their income and wealth in tax.
Initially LVT will be phased in to replace all property taxes (Council Tax, Business Rates, Stamp Duty etc.). The LVT rate is set nationally (it is the same rate in Swadlincote as it is in Kensington & Chelsea), collected nationally and distributed to Local Authorities to meet their legal obligations. Those LAs with the greatest needs will get the greatest share of the LVT raised.
For more details please visit the "LVT: what is it?" page.
Why a land tax is a bad idea
The EU Common Agricultural Policy (CAP) led to the introduction of Land Grants - known as the Basic Payment Scheme (BPS) in the UK. BPS (currently being phased out) is a payment to farmers based on land area, not on land use.
This is unfair - it becomes a subsidy for the wealthy - those with the most get the most.
Rural payments, whatever they are called, are horrendously complicated and will remain complicated under the current "Future Farming" proposals which will shift payment away from land area towards land usage and environmental protection.
A Land Tax based on land area would be unfair - an acre of bog would pay the same as an acre of development land in London.
Land Value Tax is not a land tax - it is based solely on the current open market value of the land. So, the acre of bog has a lower value than an acre of development land!
What LVT isn't
Those with wealth and land will find any reason to object to a tax which is simple, fair and impossible to avoid.
So, let us be clear - LVT is:
- not a tax on land - it is a tax on the market value of land - what someone would pay for it.
- not a tax on homes or gardens - Council Tax is a grossly unfair tax on homes and gardens.
- not a tax on buildings - you can build what you like, subject to planning permission.
- not a threat to land ownership - you can still buy and hold land.
- not a threat to land inheritance - you can still leave it to whomever you wish.
- not a new tax - it replaces existing taxes - initially Council Tax and Business rates.
- not a panacea - others reforms are required to make things fairer.
Our tax system is unfair - especially Council Tax
Those on the lowest incomes pay the highest proportion of their income on tax.
Taxes like Council Tax and VAT fall most heavily on those on the lowest incomes - because they cannot avoid spending on basic things such as electricity, gas and other items that we all consider reasonable for a decent life. In contrast, those on the highest incomes, and those not on PAYE, spend the lowest proportion of their incomes on such taxes.
An industry of Tax Advisors proves that there are hundreds of ways for those on higher earned and unearned income, and those with wealth, to avoid paying tax - from setting up a trust in a UK tax haven such as the Cayman Islands downwards. In 2022 the UK Chancellor of the Exchequer has a company ("Theleme") in the Cayman Island and his wife has non-dom status to avoid payment of tax. This type of tax avoidance is not available to those on low incomes.
LVT would replace the grossly unfair Council Tax (home owners in South Derbyshire pay between two and three times as much as this in Kensington & Chelsea) and the vast majority of us would end up paying less than we do now. LVT would also replace Business Rates - encouraging companies to set up where land values are lowest.
For simplicity and efficiency LVT is collected nationally and, if it is used to replace Council Tax, it is distributed to Local Authorities according to need - so they can meet their legal obligations. It does not mean that Councils with high value property will do well - the proceeds from nationally collected LVT are shared by all local authorities.
Land Value Tax (LVT) has supporters from the right to the left, from the Institute of Economic Affairs to us, and from all political parties: Green, Labour, Liberal Democrat and Conservative. Reasons may vary between organisations and individuals but it comes down to what is fair and what works.
We campaign for the implementation of LVT by whatever government is in power in the interest of social justice and fairness.
We are happy to hear from anyone who supports LVT - irrespective of political position.
Housing and house values
"LVT will reduce the value of land and reduce the value of my home."
Land is the single most expensive item in the cost of building a new house. Developers hoard land because its value goes up and they pay no tax on it. We are, allegedly, short of homes so anything that discourages land-banking and encourages home building is a good thing.
Those who already own their home enjoy watching their "investment" go up year on year. You are a happy bunny if you bought your home in 1986 for £140,000 and today it is worth £1,100,00!
This is silly.
£140,000 in 1986 bought you a certain sort of home. In 2022 £1,100,00 will buy you the same sort of home. The monetary value has changed but the sort of home you can afford remains the same.
You will still be able to afford the same type of home even if the land value of all homes falls slightly under LVT - because it will fall for everyone, everywhere.
Advice: think of your home as a home, not as an investment - you will be happier that way.
Under LVT developers will pay tax on the value of the land they hold - and that value will be much higher if they have been granted planning permission. So, they are encouraged to build as soon as possible to avoid their capital being eaten away by LVT.
Don't be fooled!
LVT is not "a tax on gardens" - despite what the tax-avoiding owners of the Daily Mail, Daily Telegraph, Daily Express and others would like you to believe! Under LVT they may pay more tax on their own land so they, and their "independent think tanks and institutes", will try to pull the wool over your eyes.
Note about "think tanks"
First rule of life: "follow the money."
Look at who funds them - that will tell you everything!
"He who pays the piper calls the tune" - no matter how much they scream about "independence" - that's like claiming The Daily Mail is "independent" or that the UK has "an independent free press!"
Land Value Tax
The central question of LVT
LVT is what it says on the tin: a tax on the value of land not a tax on the area of land.
Land value is totally determined by what it is worth on the open market.
"How much would someone pay for this land with its current authorised use?"
"How much would someone pay for:
- this 100 acres of fertile arable land near Spalding?"
- this 100 acres of hill land in Derbyshire?"
- this 13,500 acres of grouse moor at Bolton Abbey in Yorkshire?"
- this 12 acres of land near Derby with planning permission for 250 houses?"
- this 0.1 acres of land in Chelsea with planning permission for a six bedroom house?"
- this 1.5 acres of land in Bristol with planning permission for 4 million cubic feet of warehousing?"
How do we establish value?
The value of land is obvious if it is sold on the open market - what was paid for it - and that value is recorded on the Land Registry.
The Valuation Office was established in 1910 to implement a Land Value Tax!
Incompetence, limited imagination, bad planning, exceptions, WW1, huge pressure from powerful landowners and political in-fightingled to Land Value Tax being abolished in 1920.
The Valuation Office is now the Valuation Office Agency (VOA) and, with over 3,600 staff nationwide, is the largest employer of chartered surveyors in the country. The VOA has over 100 years experience in valuing land and property.
Videos about Land Value Tax
These videos were not produced by us but they provide an introduction to LVT.
This land is our land
No-one "owns" land in the UK, since 1066 it has been owned by us all through "The Crown". Land is a national asset and we have the right to know who holds the freehold on it. We don't know for two main reasons:
- The Land Registry only records transactions on land - so we only know about land that has changed hands since the Land Registry was established in 1862. A huge amount of land has remained in the hands of the same families for hundreds of years - but we have no record of who the owners really are.
- The Land Registry records the legal owner, not the beneficial owner. This means that people can hide behind companies, many of which are not registered in this country.
Burying wealth in land, and transferring ownership of that land to a company or trust registered in a tax haven, is one of the easiest ways for the wealthy to avoid tax - and it is perfectly legal!
Land should be used wisely for the benefit of us all and for the benefit of future generations - so we need to know which individuals are responsible for our land.
Laws relating to land are complex and there are different laws in different parts of the UK
See our page on LVT: history of land ownership for more details on the history of land ownership in the UK.
Land Value Tax (LVT)
Public services (health, education etc.) depend on the taxes we pay.
At the moment our national and local tax system is unfair, those who earn the least pay the highest proportion of their income in various taxes. Those with the most find it easy to avoid paying tax through trusts, tax havens and other fiddles.
- Simple to understand.
- Impossible to avoid.
- Straightforward to implement.
- A replacement for existing taxes which are unfair, complex and easy to avoid.
Please see our page LVT: what is it? for more details.