In Tax Trial: Land Value Tax for London?, Labour AM Tom Copley suggests that such a levy could provide incentives to build over 200,000 new homes in the city.
In September last year, members the Greater London Authority’s planning committee recommended that Copley be appointed as rapporteur to examine the pros and cons of Land Value Tax.
His report, published today, notes that buildings rather than land that are currently taxed in the UK and current tax and business rates only apply to occupied and developed land, which can discourage development. Vacant lots and car parks could be usefully developed with a different tax regime, the report argues.
“The greatest challenge facing the next mayor will be achieving a step change in the level of housebuilding in London. London needs to maximise sites available for housing and infrastructure. A Land Value Tax could provide the solution, and this report examines its potential to bring more land forward for development,” said Copley.
“The current tax system can encourage inefficient land use, deter development and incentivise land banking. The evidence suggests that a Land Value Tax could incentivise development and more efficient use of land. The time has come to test it out, and we offer the next mayor a clear course of action to pursue.”
Specifically, the report recommends that the next mayor identify what further devolved powers might be needed to bring in a Land Value Tax in London and then explore the tax’s potential through a feasibility study and pilot.
