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    B1102 – Land Tax Bill 2017, Gladstone1885 MP

    Land Tax Bill 2017

    An Act to replace several U.K. taxes with a tax on the unimproved value of land.

    BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

    1: Implementation of the Land Tax.
    (1) There is hereby assessed an annual tax of 2.35% on the value of all properties, excluding the value of improvements made upon them.
    (2) The Minister for Revenue & Customs is directed to establish procedures for annually assessing the value of all privately-held land in the UK.
    (3) For the purposes of this Act:—
    (2) a. "properties" means any piece of land held in private ownership.
    (2) b. "improvements" means modifications that would serve to increase the value of the property.

    2: Repeal of Certain Taxes
    (1) The following taxes are hereby abolished:
    a) Stamp Duty Land Tax
    b) Capital Gains Tax
    c) Inheritance Tax
    d) Insurance Premium Tax
    (2) The corporation tax rate is lowered to 15%.

    3: Extent
    This Act extends to the United Kingdom.

    4: Commencement
    The provisions of this Act come into force immediately.

    5: Short Title
    This Act may be cited as the Land Tax Act 2016.


    Notes
    The loss of revenue caused by abolishing the taxes listed above and reducing the corporate rate would be roughly £40 billion, if we assume that a reduction in corporate tax would cause a loss of ¼ of the revenue currently generated by it. It’s not far-fetched to assume that the loss would be smaller due to new economic growth created by the improved business environment this bill would allow for.

    The reason for replacing Stamp Duty Land Tax in particular is that it is a one-off charge on the value of land which penalizes people who move around frequently. You can read more about it here in this lovely paper produced by the Liberal Democrats ALTER organization. In the paper, they suggest that a 0.5% Land Tax would eventually generate £8.5 billion yearly in revenue (takes about eight years to fully return revenue to normal levels). Thus, its simple multiplication to get to the tax rate proposed in this bill that allows us to abolish several other taxes as well.

    The reason for reducing corporate tax rate is because it is not truly a tax on corporations. It is impossible to tax corporations without harming workers, shareholders and customers, and the bulk of economic research suggests that most of the burden is borne by these groups rather than the business itself. It also makes us much more competitive seeing that Ireland’s rate is 12.5%.
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    I know you need to be impartial, but what do you think of this bill Mr Speaker?
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    I like Section 1 a lot. However, I dislike Section 2 because abolishing inheritance tax is not a good idea in the long run so nay.
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    (Original post by Ulik Mcghee)
    I know you need to be impartial, but what do you think of this bill Mr Speaker?
    I'm pleased to see from the formatting that someone has used my bill-writing guide, and that's all I can say.
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    We had this a bit back (without the repeals) and a slightly higher rate, bit the costing is off unless the old rate was a lot higher than I remember

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    £40bn? :eek:
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    No, this tax places an unfair burden on the poorest in society by increasing the total tax the poorest pay in the current system. The average semi-detached house in Britain is built on 1/8 of an acre, meaning 19.76 houses can be built on one hectare. Using the land valuation for policy document published by the government, the true cost of a 2.35% tax can be see.

    A house in Leeds will have to pay an annual tax of £2509.35, a house in Rochdale will have to pay £1254.66, a house in York will be paying £3222.90, but when houses in London borough are looked at the cost increases hugely. A house in Chelsea will be taxed at £159000, and a house in Croydon will be taxed at £20217 per year which is more than individuals living in those two areas can afford. The result of this tax will be to turn big cities like London from a diverse city, to a city where only the very wealthy can live, while ghettoising poorer cities as poorer families enter these cities to avoid huge taxes. The author forgets the value of a piece of land is not a reflection of what the individuals owning that land have in income to be able to pay the tax. To add some context to this bill, the houses in the deprives area of Rochdale will be forced to pay a similar rate to a Ban D house in the current system.
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    (Original post by Saracen's Fez)
    I'm pleased to see from the formatting that someone has used my bill-writing guide, and that's all I can say.
    Surely with you vacating your role you can rip it to shreds?
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    (Original post by Jammy Duel)
    We had this a bit back (without the repeals) and a slightly higher rate, bit the costing is off unless the old rate was a lot higher than I remember

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    I remember the campaign we fought to pass the repeal, the stubbornness of the left-wing by denying obvious faults, and the false promises of amendments. It is a big disappointment to see a new bill with the same flaws being published to target the poorest in society.
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    (Original post by Nigel Farage MEP)
    I remember the campaign we fought to pass the repeal, the stubbornness of the left-wing by denying obvious faults, and the false promises of amendments. It is a big disappointment to see a new bill with the same flaws being published to target the poorest in society.
    This one doesn't even include council tax in the repeals which makes it a second annual levy on property.
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    (Original post by Jammy Duel)
    This one doesn't even include council tax in the repeals which makes it a second annual levy on property.
    The bill increases taxes on the poor by £2500 while abolishing all of the taxes the poor do not pay: the bill is indefensible.
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    (Original post by Nigel Farage MEP)
    No, this tax places an unfair burden on the poorest in society by increasing the total tax the poorest pay in the current system. The average semi-detached house in Britain is built on 1/8 of an acre, meaning 19.76 houses can be built on one hectare. Using the land valuation for policy document published by the government, the true cost of a 2.35% tax can be see.

    A house in Leeds will have to pay an annual tax of £2509.35, a house in Rochdale will have to pay £1254.66, a house in York will be paying £3222.90, but when houses in London borough are looked at the cost increases hugely. A house in Chelsea will be taxed at £159000, and a house in Croydon will be taxed at £20217 per year which is more than individuals living in those two areas can afford. The result of this tax will be to turn big cities like London from a diverse city, to a city where only the very wealthy can live, while ghettoising poorer cities as poorer families enter these cities to avoid huge taxes. The author forgets the value of a piece of land is not a reflection of what the individuals owning that land have in income to be able to pay the tax. To add some context to this bill, the houses in the deprives area of Rochdale will be forced to pay a similar rate to a Ban D house in the current system.
    Are you aware of what households currently pay vs what you have calculated they would pay in this bill? Stamp Duty Land Tax is no small burden for individuals looking to buy homes, and corporate tax is paid by everyone regardless of income as an unseen tax. Inheritance tax really becomes a burden when applied to property.

    I can assure you that this tax is very progressive given that the vast majority of land owned in the UK is owned by wealthy individuals and corporations.
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    Well, went back to my caluclations for the ATA repeal. The rate here is approxiamtely half what was presented there so the tax liability of England would sit between about £80bn and £200bn. Or an extra £2-10k per household, on top of council tax.

    Oh Libertarians are so funny.
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    (Original post by Gladstone1885)
    Are you aware of what households currently pay vs what you have calculated they would pay in this bill? Stamp Duty Land Tax is no small burden for individuals looking to buy homes, and corporate tax is paid by everyone regardless of income as an unseen tax. Inheritance tax really becomes a burden when applied to property.

    I can assure you that this tax is very progressive given that the vast majority of land owned in the UK is owned by wealthy individuals and corporations.
    It does not matter, the poor individuals will still be paying council tax in addition to the tax introduced by this bill. I do not believe a 5% cut in corporation tax will lead to a huge fall in prices that the poorest in society can afford to pay over £3000 a year in taxes on their property. You include Stamp Duty, however, Stamp Duty is not paid by all individuals buying a house, Stamp Duty is paid on the purchase of houses over £125000 but most poor individual have houses below the threshold so the abolition of Stamp Duty does not help them.

    Abolishing Inheritance Tax does not help the poorest because the poorest do not have houses worth £1000000 to leave to family members which is the current boundary, and the poorest do not have £500000 to leave to family which is the tax free threshold in the current system, and abolishing a small 9.5% Insurance Premium tax is not going to help the poorest individuals. The tax increases in this bill are thousands which are no offset by the abolition of small taxes the poor do not pay.
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    (Original post by Gladstone1885)
    Are you aware of what households currently pay vs what you have calculated they would pay in this bill? Stamp Duty Land Tax is no small burden for individuals looking to buy homes, and corporate tax is paid by everyone regardless of income as an unseen tax. Inheritance tax really becomes a burden when applied to property.

    I can assure you that this tax is very progressive given that the vast majority of land owned in the UK is owned by wealthy individuals and corporations.
    I think the question is whether you are aware of what is currently paid. The average house purchase has a SDLT liability of £1900. The average household is then paying if we spread this over the average time a house is held for we're looking at about £100 per year

    Council tax then has the average household paying ~£1400 a year. Then this has them paying on top of that between £4k and £10k annually on average. You're replacing a one off tax with an annual tax 2-5 times that amount.

    If we next look at IHT the revenues are the equivalent of about £100 per household per year

    IPT about the same again, at most about £150 per year

    And the same again for CGT

    And about £500 from the Corp tax.

    The repealed taxes total, when annualised where necessary, on average about £1000 per household per year, and you're replacing this with a tax 4-10 times that and then council tax on top of that.

    Why are business rates not removed? Or council tax?

    Land taxes of this form are also highly indiscriminate, they expel the poor from London for a start
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    (Original post by Nigel Farage MEP)
    It does not matter, the poor individuals will still be paying council tax in addition to the tax introduced by this bill. I do not believe a 5% cut in corporation tax will lead to a huge fall in prices that the poorest in society can afford to pay over £3000 a year in taxes on their property. You include Stamp Duty, however, Stamp Duty is not paid by all individuals buying a house, Stamp Duty is paid on the purchase of houses over £125000 but most poor individual have houses below the threshold so the abolition of Stamp Duty does not help them.

    Abolishing Inheritance Tax does not help the poorest because the poorest do not have houses worth £1000000 to leave to family members which is the current boundary, and the poorest do not have £500000 to leave to family which is the tax free threshold in the current system, and abolishing a small 9.5% Insurance Premium tax is not going to help the poorest individuals. The tax increases in this bill are thousands which are no offset by the abolition of small taxes the poor do not pay.
    Where are you getting the 3,000 GBP figure? This is a tax on the value of land, not the house built upon the land as well. SDLT applies to the entire property value.

    Let's say your house cost 150,000, since your concern is for the poor. Now for this new tax, the land value might be 50,000, which translates to a tax of 1,175 GBP per year.

    I see your point on council taxes and I will consider it.
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    (Original post by Gladstone1885)
    Where are you getting the 3,000 GBP figure? This is a tax on the value of land, not the house built upon the land as well. SDLT applies to the entire property value.

    Let's say your house cost 150,000, since your concern is for the poor. Now for this new tax, the land value might be 50,000, which translates to a tax of 1,175 GBP per year.

    I see your point on council taxes and I will consider it.
    The problem is you're supposing land values and not bothering to look them up
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    A loss in revenue of £40 billion? Christ.


    We have proposed a tax like this in the past (in a fashion that wasn't so damaging to the national finances). It did not go down well.
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    (Original post by Gladstone1885)
    Where are you getting the 3,000 GBP figure? This is a tax on the value of land, not the house built upon the land as well. SDLT applies to the entire property value.

    Let's say your house cost 150,000, since your concern is for the poor. Now for this new tax, the land value might be 50,000, which translates to a tax of 1,175 GBP per year.

    I see your point on council taxes and I will consider it.
    I am getting the figure from research by using the government's land value estimates for policy appraisal document to find that one hectare of land in Leeds is valued at £2110000. Using the average plot size of a semi-detached house which is 1/8 of an acre, we find 19.7 houses can be build on one hectare of land. As a result, each plot a house is build on is worth £107106. As the annual tax is 2.35% of the land value, the plot owner would need to pay a little over £2500 per year in tax, in addition to current council tax which is £926 for a Band A house, producing a total annual tax of more than £3400 per house, however, it should be noted the council tax will likely be higher than the minimum Band A rate. The same process can be followed to work out the expected tax needing to be paid in any area using the values provided in the government land value estimates for policy appraisal document
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    (Original post by Nigel Farage MEP)
    I am getting the figure from research by using the government's land value estimates for policy appraisal document to find that one hectare of land in Leeds is valued at £2110000. Using the average plot size of a semi-detached house which is 1/8 of an acre, we find 19.7 houses can be build on one hectare of land. As a result, each plot a house is build on is worth £107106. As the annual tax is 2.35% of the land value, the plot owner would need to pay a little over £2500 per year in tax, in addition to current council tax which is £926 for a Band A house, producing a total annual tax of more than £3400 per house, however, it should be noted the council tax will likely be higher than the minimum Band A rate. The same process can be followed to work out the expected tax needing to be paid in any area using the values provided in the government land value estimates for policy appraisal document
    .
    I can see you've done your research so I will consider this before the second reading. I won't keep debating when you clearly know your facts on this one


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