We published an article yesterday about Labour’s proposed Land Value Tax. However, after doing more research into the proposals, it became clear that we had made a fundamental mistake when calculating the amount ordinary homeowners might pay.
Based on the proposals set forward in Labour’s preferred proposal document, the value of your property would have no bearing whatsoever on the amount of land value tax you pay. The amount would be calculated solely on the value of the unimproved land. (see below)
In essence, what this means is that the tax bills for any ordinary homeowner would decrease substantially from the amount of council tax you currently pay. The land value tax is based on the value of the land you own, regardless of any structure built upon it.
It’s hard to put an estimate on it, but for the purpose of this calculation we will hypothesise that an average unimproved plot is worth half the amount when disregarding the property built upon it. This is a pretty basic monetary assumption, and the plot of land by itself would almost certainly be worth less than half the value of the property.
However, if we do use this basis for the calculation, someone owning a home worth £250,000 would pay just £1062.50 in Land Value Tax per year – almost certainly a substantial decrease on their current council tax bill.
We apologise once again for making this rather careless mistake, and we do hope this quells any worries ordinary homeowners may have had about the Land Value Tax.
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