Noted UK Think Tank: Tax Land Values

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Noted UK Think Tank: Tax Land Values

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Noted UK Think Tank: Tax Land Values

Joshua Vincent: Posted on Monday, April 04, 2011 8:36 AM

Institute for Fiscal Studies Concludes LVT is best for local finance

The Institute for Fiscal Studies as well-respected civic research group has been working on a non-partisan basis for many years in the UK. With LVT debate reaching the highest levels of government, the Institute tackled the issues of local government finance in the the Mirrlees Review.

The ISF's Stuart Adam provides both background and a matrix of preference taxation plans. UrbanTools might quibble with the finding that land and building values will be difficult to split, as well as concluding taxation of residential buildings is a good facet of tax policy, but overall it's an unjaundiced look at a program that may provide useful revenues with blocking economic growth and community sustainability.

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John on Wednesday, April 20, 2011 5:56 AM

This is great news from the IFS. It all helps. LVT is gathering a following in high places in the UK. Stuart Adam's finding that land and building values will be difficult to split is way off mark. Insurance companies and estate agents do this very well indeed. Insurance companies know the cost of a total rebuild of a house - the cost of the building. Estate agents know the total cost of the house/land. Deduct one from the other. Very simple. Adam needs to look deeper. Taxation of residential buildings is not a good tax policy at all. If people extend their homes to improve the quality of life of their families, which also creates employment and economic growth in the construction industry and its manufacturing supply industries, and future maintenance, the home owners is penalized. This taxing of buildings prevents growth in a community and reduces quality of life. How about loopholes like removing parts of the roof to make it uninhabitable, to prevent paying taxes on the building? Speculators do this, leaving behind urban decay. This report appears not plug that. However, overall this is encouraging.

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