Large areas of land suitable for housing are at present vacant or under-used. To loosen the grip on land, the value of every piece of land in the country must first be assessed. A tax should then be collected, related to this valuation. This is called Land Value Taxation or LVT. At first the tax would be small, but in time it would be increased while other taxes are proportionately diminished. If owners were required to pay a tax related to the value of their holdings, two things would happen:

� large areas of housing land that are at present withheld would come onto the market.

� people owning land that was not used would also be required to pay the tax. So they would have a powerful incentive either to use it or dispose of it.

� the price would stabilize. a lot of people who previously could not afford to buy a house because of the land cost would be able to do so.

� other taxes (such as VAT or income tax) could be drastically reduced.

The �Green� environment

There is great pressure from developers to persuade local authorities to release greenbelt land on which it is at present unlawful to build. At the same time, there are many brownfield sites where building could take place without upsetting environmentalists. By inducing owners of underused land to redevelop, LVT would protect the �green� areas. Today, pressure to corner building land produces another deplorable result: builders guess that, sooner or later, local authorities will be compelled to release greenfield land where, at present, house building is unlawful. So they buy up that land for �land banks�, and are quite prepared to wait for years until development is permitted. The idle land then deteriorates. LVT would mean an end to this practice. Builders would find themselves carrying an unnecessary tax, making land banks too costly to retain.

Is there a snag?

The price of houses will stabilize with LVT because the price of the land will stabilize. But will this merely mean that the householder will be lumbered with a new tax, and therefore be no better off in the end? No. As L VT advances, other taxes will be reduced. So the householder will be better off financially.

Nobody loses; everybody gains:

� Encroachment on the green environment will be reduced.

� the builder will not need to tie up his money in speculative land banks

� the would-be house owner will now be able to buy

� people will buy houses to live in not to make money on

� the economy will be boosted because taxes that cripple production will be reduced.

�from a leaflet published by the HENRY GEORGE FOUNDATION, Suite 427, London Fruit Exchange,

Brushfield Street, London E 1 6EL Tel: 020 7377 8885 Fax: 020 7377 8686

e-mail: [email protected] www.HenryGeorgeUK.cjb.net