Caroline Lucas, the Green Party MP for Brighton, has urged the government to consider introducing a Land Value Tax (LVT) arguing that it would stimulate economic activity and allow the Treasury to cut income tax for middle earners. Ms Lucas made the call via a private members bill introduced to parliament on Friday.
Caroline Lucas MP
Supporters of the bill claim that a reform of the current system would prompt property companies to return derelict industrial land to either residential or commercial use. Currently developers pay no tax on land with planning permission and can sit on it for years.
In the current economic climate property companies are less inclined to speculative developments and are keen on incentives before commencing projects. Lucas, who also believes that the business rates system is flawed, claims that a LVT would provide that incentive.
However, Treasury minister David Gauke has already expressed his opposition to the proposal, telling Lucas that a LVT would be an expensive burden on property developers. Instead the government is expected to press ahead with planning deregulation, which it hopes will stimulate development.
Ms Lucas responded by saying; “Given the increasing support among economists and politicians for a land value tax, I had hoped the Treasury would approach this effort to create fairer property taxes with at least an open mind.
“Yet in responding to my debate on LVT, David Gauke stubbornly refused to even commissioning research into the reform, whilst completely turning a blind eye to the potential benefits, which are considerable.”
The MP added that the case for LVT is ‘overwhelming’ and urged the Treasury to consider ‘progressive solutions’ to the UKs ‘broken tax system.’
What impact do you think LVT would have on the commercial property market? Share your views with us below.
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