Action for Land Tax and Economic Reform


Land Value Tax (LVT) is a levy on the unimproved value of land, it disregards the value of building, personal property and other improvements to real estate. LVT has been referred to as "the perfect tax" and the economic efficiency of a Land Value Tax has been known since the eighteenth century. LVT is a progressive tax in that the tax burden falls on titleholders in proportion to the value of locations, the ownership of which is highly correlated with overall wealth and income.

Land Value Tax would be payable each year depending on the location and size of a plot. We advocate that it should replace some existing taxes. It should not add to the overall tax burden, its purpose is to shift tax away from income taxes . Land means the site alone. A vacant plot in a row of houses would be taxed the same as a similar built-on plot. It taxes the size and location of he plot. It does not tax buildings or other works.

There are three strong arguments for the tax. It is socially just. It is the best way of financing infrastructure. And it is economically efficient.

First social justice. Property taxes are fairer than income taxes. In the UK the wealthiest 1% own almost 25% of all property. Today we base the tax system almost entirely on income rather than assets. This means the very rich avoid paying their fair share of taxes. This entrenches inequality.

Second, infrastructure. The benefits of infrastructure are uneven. A fast rail line from London to Birmingham will provide a windfall for property owners in those locations. It won't benefit other locations nearly as much. At present every taxpayer, everywhere, pays. Land value tax corrects this. It recoups costs from those who benefit the most.

Third, economic efficiency. Land value tax is payable whether or not the owner actually uses the plot productively. It penalizes owners of empty houses; owners of run-down sites. Unlike now, they would be taxed at the same rate as a site in productive use. This would promote inner city regeneration. There is a myth that Land Value Tax would destroy green spaces. In fact, the City of New York made a profit when it created Central Park. It greened over existing built-up areas. The increased property tax from surrounding neighbourhoods paid for this.

In summary, Land Value Tax is pro-enterprise and green. Its introduction would allow other taxes to be reduced; especially those on income and profits. Enterprise would be better rewarded. Building on a property doesn't change its location value. The location value of land comes from geography -a beautiful view; or from investment elsewhere - for example a high speed railway. Location value is maintained by society. It just and efficient to tax it.

Watch our Spring 2022 Conference Fringe

Latest News

South Central Lib Dem Conference to debate LVT & Housing

The Policy & Conference Committees of South Central Region Lib Dems have agreed to debate a motion calling for LVT at their conference in Oxford on 30 October. The motion was drafted by ALTER committee members Margaret Godden (former Deputy Leader of Oxfordshire County Council) and Dr Tony Vickers, who is currently Lib Dem Housing Spokesman on West Berkshire Council.

13 Oct 2010

Lib Dem Ministers already acting on Conference's unanimous support of LVT Motion

The Liberal Democrats' South Central Region Conference on 30th October at Oxford Brookes University voted unanimously to support a Motion proposed by ALTER Hon Sec Dr David Cooper, which called for Land-value Taxation to be more strongly pushed by Lib Dems in Government, as a solution to the housing crisis. Not one person spoke against the motion.

16 Nov 2010

Newcastle Land Value research bid

An academic at Northumbria University is keen to progress with a research project for one of his built environment postgraduates which could be highly significant in preparation for an eventual implementation of LVT in the UK.

23 Nov 2010

IFS/Mirrlees Review calls for LVT

The independent Insitutute for Fiscal Studies (IFS) has published its findings on the reform of UK taxation. It includes the replacement of business rates and Stamp Duty Land Tax by "a land value tax for business and agricultural land" - but only "if practicable".

24 Nov 2010

From the Lib Dem ALTER YouTube Land Tax Playlist