People interested in improving the environment are not using all the available “weapons” in order to do so.
Land is always needed for housing, for industry and for many other purposes. Yet much land which could be used for such purposes, without violating any principles of planning or of environmental preservation, is held out of use.
There are various reasons for this absurd state of affairs, not least of which is the fact that owners of undeveloped, or underdeveloped, urban land frequently expect land prices to rise, and hope to make a killing later on.
Our present taxation and rating system positively encourages this wastage of resources. Urban land without buildings, or with buildings which are unfit for use, is classified as “vacant land”. Vacant land is not liable for either Council Tax or Uniform Business Rates (UBR). Partially empty buildings, such as upper floors of shops, are also not liable to either Council Tax or UBR.
A Vacant Land Tax?
Some people have suggested that the problem could be met by imposing a Vacant Land Tax (VLT) on unused urban sites. This might well be an improvement on the present state of affairs, but there are serious difficulties. For example…
1. It is difficult to define “vacant”, and any definition is likely to be arbitrary. To give but one example, it is hard to see how a VLT could deal with the owner of a big and otherwise empty site with a small business operating from one corner. Perhaps such difficulties could be met… but only with a lot more bureaucracy and fat fees for lawyers.
2, There are other technical problems, such as how soon after the vacancy the VLT bill would appear, and who would be responsible for inspecting. More bureaucracy, more lawyers!
3. A VLT will not make provision for bringing into better use land which is not technically vacant, but is occupied by run-down buildings which blight the value of nearby property.
Is there a better way?
Yes, there is a third way, which is better than either the present state of affairs or VLT. It is known as Site Value Rating (SVR).
All land would first be valued. The valuation would ignore the value of any buildings or other developments on the land, but would consider the site alone. Professional valuers agree that the process of valuation would be simple and cheap.
A rate would then be levied on the basis of that valuation, which would replace the present Council Tax on domestic property and UBR on commercial property.
The owner of vacant land, or land which is inadequately used, would pay the same as he would pay if the land were put to the best use. He would therefore have no incentive to hold it back, and would either develop it himself or sell it to somebody who was prepared to do so.
In the past century, there has been much legislation designed to protect wildlife and
the environment. Some of this legislation has been more or less effective in its
purpose. Yet all these developments together have done no more than slow the
decline of wilderness and wildlife; they have certainly failed to reverse it. One
powerful device in the armoury of the environmentalists has been largely neglected:
the economic weapon. A great deal can be done to preserve the natural environment
and its inhabitants by making it profitable for people to help the natural environment
and unprofitable for them to damage it.
The effect of LVT on agriculture is discussed more fully in a Signed Article by Dr Duncan Pickard, also published by LANDISFREE.
There are many other reasons for supporting LVT which are discussed in other Topic
Papers and Signed Articles published by LANDISFREE.