Plans to tax land ownership could become a reality if two pilot schemes in Liverpool and Oxfordshire are given the go-ahead.
The land value tax (LVT), which could see landowners paying around 2% of the undeveloped rental value of their land each year, is being mooted by the two councils as an incentive for regeneration.
Oxfordshire and Liverpool are preparing to be the first councils to test the pilot schemes.
If successful, the tax could be rolled out nationwide, meaning that any developer “banking” land would be charged.
If Liverpools pilot on the business district at London Road adjacent to Lime Street station is successful, the council plans to extend it eastwards from the city centre to the M62.
The council has identified and consulted the landowners, including the university and department store group TJ Hughes.
The valuation of the area, which is being conducted by Corby Kane Howard Partnership, will be completed next month.
Liberal Democrat councillor Chris Newby, who has been leading the project, said: “The situation in Liverpool, with institutions banking land and using the value to develop in the South East, is a crime.”
The Liverpool pilot, which has been in planning for the past two years, will run in parallel to Oxfordshires rural one.
Labour councillor Brian Hodgson, at Oxfordshire county council, said: “We expect the executive to ratify the plans for the pilot next week.”
The scheme has been used in Hong Kong and Sydney but RICS chairman of regeneration Nigel Smith said: “The tax would be unworkable. Everyone will appeal and it will break down.”
EGi News 15/07/02
