Implementing LVT is straightforward:
- Start a planning process to acquire all the data necessary and to assess the impact on different types of freeholder.
- Engage in a public information programme to show the benefits of LVT and to answer possible objections.
- Ensure the freehold ownership of all land is registered at the Land Registry. The freeholder pays the LVT.
- Ensure all land is valued. This gives us the total market value of all land in the country. See note 1 below.
- Determine which existing taxes it will replace - all those associated with land and property values for a start.
- Determine the amount to be raised by LVT.
- Set the LVT rate as a national percentage of land value.
- Collect the LVT nationally. This is the cheapest and easiest way to do it. See note 2 below.
- Transfer the LVT raised to Local Authorities to provide local services. See note 3 below.
- Implement a GIS system so we can all see the value of land. See note 4 below.
- Valuing land
Much of this is already done since the market value of land is recorded by the Land Registry.
The same would have to be done if the totally unfair Council Tax system required a revaluation - such a revaluation would be a massive step backwards whereas valuation for LVT would open doors for the future.
- Collecting LVT
The sudden introduction of LVT would make it difficult for people to plan for the future, particularly those with land that has not been taxed before.
It is therefore proposed that LVT be introduced over a number of years. During this time the proportion raised by LVT would rise and the proportion raised by other taxes (Council Tax, Business Rates etc.) would fall.
The LVT rate (a percentage of land value) is set nationally - like Income Tax. It therefore makes economic sense to have it collected nationally rather than replicate the work across 152 local authorities in England alone.
- Distributing LVT
There is no link between the total LVT paid by freeholders in a Local Authority (LA) area and the amount the LA receives from national LVT income.
LVT income is distributed to LAs according to need - that's where politics comes in - just as now.
Is has been argued that LVT should be collected locally to ensure that LAs have control of both income and expenditure. Experience over the last few years shows that LAs have little control within a framework set by national government - Northamtonshire County Council effectively went bankrupt under this scheme.
There will be political arguments about the distribution of LVT income and the "needs" within individual LAs. However, LAs are obliged to provide certain services and the costs of these are straightforward to assess - even though this has rarely been done by national government when imposing new service requirements onto LAs.
Until now those living in the richest areas, with the most expensive land, have paid the least in Council Tax - because the areas they live in have the lowest needs to be met by taxation.
- GIS systems
Online Geographic Information Systems (GIS) enable all of us to see the value of land.
Such systems have been implemented elsewhere in the world so clicking on a map, or entering location details, brings up a map showing the value of land used for calculating LVT.
GIS provides the ultimate level of transparency. We are all human, we are all nosey, so any attempt to under value land will be quickly spotted. The freeholder and the valuer will be held criminally liable for false values.
- Simple to understand.
- Fair - because it is based on market value - what someone would pay for it.
- Transparent - the Land Register is open to all.
- Not rocket science!