Land value tax - a Liberal Democrat activist urges his party to adopt the Greens' policy
Frank de Jong
Taxing land rather than property would be more progressive, argues Andrew Chamberlain
The establishment of the Scottish Government's cross party commission on replacing the Council Tax presents Scotland's political parties with a choice. They can tinker with the Council Tax to make it a bit more progressive, or they can take the opportunity to move to an altogether more rational form of taxation.
The approach that would most benefit Scotland would be for the commission to adopt the Greens' policy of replacing the Council Tax with a land value tax. Instead of taxing buildings, this form of tax only targets the value of the land that they sit on.
By taxing land you raise large amounts of additional revenue from owners of large estates and property in prime locations. This allows the amount of tax paid by people living in less desirable locations to be reduced, resulting in a more progressive system.
Land value taxation also has the positive side effect of discouraging people from holding on to land that they are not using; developers with land banks, for example. The end result should be that land in Scotland ends up being used more productively, with more housing development taking place and downward pressure on house prices. This effect will be enhanced if LBTT is abolished after the land value tax is introduced.
To introduce a land value tax, the land in Scotland will need to be valued. This is no more difficult than conducting a property revaluation for Council Tax, something that is now many years overdue. Protection could be provided for people who would suffer hardship due to additional tax liability under the new system by a provision to delay payment until they sell their properties.
For all of the political representatives on the Local Tax Reform commission, a more progressive system that encourages a saner distribution of property should be a prize worth their effort. The Liberal Democrats in particular should be open to this policy given that the party already supports replacing business rates with a form of land value tax.
Politics being as it is, the path of least resistance is usually the one taken. In order to promote land value tax as a viable option for Scotland, a group of campaigners and academics from all parties and none have formed the Scottish Land Revenue Group. This group's first conference took place in Glasgow on Wednesday. If they are to be successful then they need your support.
Andrew Chamberlain is the former leader of the Liberal Democrat group on North Ayrshire Council