harry wrote:
On Mar 13, 11:12 pm, Tony Bryer wrote:
On Tue, 13 Mar 2012 14:44:16 -0700 (PDT) Jgharston wrote :
How would Land Valuation Taxation clear up dilapidated buildings?
Because it acts as a holding cost. I remember stories about redundant
factories being bought and demolished or have their roofs removed so
as not to pay rates. In some cases this hastens the inevitable; in
other cases potentially reusable buildings are destroyed.
Here in Australia we have land tax - all properties are revalued
every couple of years and your rate notice shows the land value and
rateable value. In Victoria if you own land other than your own home
whose total value is greater than $250K (£165K) you pay land tax on
a sliding scale of 0.25%-2.25%. If you incur this tax on land that
is not income producing you cannot treat it as a taxable expense: it
increases the cost base of the land for Capital Gains purposes. So
if you own ten BTL houses all rented out, your land tax is set
against the rents for tax purposes. If you buy a piece of land and
are just sitting on it, you pay land tax, no tax relief (until you
sell), an encouragement to bring it back into beneficial use.
The one quirk is that it is a State Tax so BTL owners with lots of
properties can mitigate its effect by buying in more than one state.
--
Tony Bryer, Greentram: 'Software to build on',
Melbourne, Australia www.greentram.com
Here in Malvern (UK) some local land lord has demolished an empty
"Industrial Unit" to avoid paying local council tax.
He had the rubble piled up and put a notice on top to that effect.
Was in the local papers.
So he now pays ZERO tax. A parasite. With Land Valuation Tax he would have
no need to demolish the building. The levy is on the land whether there is
a building on it or not. If he can't make productive use of the land then he
sell it to someone who can. LVT forces productive use of land.
Johannesburg, South Africa has no tax on buildings. The entire property tax
is on land values and makes a super-city froma cvity hat shoudl have dropped
toa town long ago. Mason Gaffney, a highly respected land economist and
Professor of Economics at UC Riverside, visited Johannesburg. This is what
he said about it.
"The miracle of Johannesburg: Jo-burg is a Bootstrap City. It should have
died when its gold mines played out, like a proper mining boomtown; instead
it remains as the economic capital of its nation and half a continent.
"Johannesburg defies most laws of urban economics, e.g. that mines create no
great cities. Explainers still site the mines, but its mines have played
out; it should now be a ghost town. It has no harbor, no water
transportation, nor even any gravity water supply. It is, in fact, on a
ridge top, the Rand or "reef," at an elevation of 5,000 ft. Unlike Chicago
or Boston, it has no sunburst of rail lines, except perhaps what it has
attracted itself. It is "on the main rail line," Explainers say, but so are
1000 miles of other sites. The natural site lacks outstanding amenities, and
certainly can't hold a candle to Cape Town. Jo-burg has no governmental
economic base. Surrounding farmland is poor.
Why Johannesburg? Why is it the largest city, the center of finance,
industry, commerce, and international air travel? As a public finance
economist I may overvalue incentive taxation, but Jo-burg has it. The
property tax is on site value only, and at a high rate: they tell me it is
4%. This is what makes Jo-burg distinctive. Challenge and response: Jo-burg
had to do something right in order to survive, and that is what it did. It
not only survived, it became and remains Number One. Give me a better
explanation and I'll back off. I haven't heard one yet."