BASED ON Actual Evidence
Many Land Value Taxers reckon a high tax on annual site-only local rental beliefs would prevent bubbles in land and property prices. On the basis of actual evidence, I highly suspect that this is not true. 1. I base this on the real-life example of Business Rates (also known as National Non-Domestic Rates), which are the closest thing we must LVT in the UK (it’s a intensifying property taxes with a few tweaks). Broadly speaking, NNDR are calculated as 47.1 % of the annual rental value of the complete property.
In other words, if you are a tenant paying £10,000 lease to the landlord, you also have to pay £4,710 in NNDR. Land Value Tax (LVT) has lots of advantages. 4. For simplicity therefore, let’s assume that the landlord charges the tenant an inclusive price of £14,710 in lease and pays £4,710 NNDR.
Unless the landlord is a taxes exempt body (pension money, Crown estates, CofE Commissioners etc) then there’s tax or corporation taxes to pay as well, after deducting interest and maintenance costs, but let’s disregard that for the present time. That compatible a tax of 32% on the full total rental value. 5. The break up between the lease paid for the positioning and for the building depends on what type of premises and where.
6. For simplicity let`s say that normally, one-third to one-half of the rent that businesses pay is for the location and the others is for the structures and improvement. Thus it wouldn’t make … Read the rest
