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IRRV CONFERENCE: VIABILITY OF SITE VALUE RATING/LAND VALUE TAXATION DEBATED

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Site value rating should be implemented in Britain, Nathaniel Lichfield said in a controversial paper to the IRRV c...
Site value rating should be implemented in Britain, Nathaniel Lichfield said in a controversial paper to the IRRV conference in Blackpool today.

Professor Lichfield has been commissioned by the US-based Lincoln Institute of Land Policy to research whether site value rating, also termed land value taxation, would be viable in this country. Such a system has been proposed since the 19th century but was abandoned in the UK in the 1950s, he said.

Prof Lichfield advocated this kind of taxation as a way for the community to receive the benefit of increases in land value through development. At present, planning gain deals are the only way for a community short of resources to get any benefit from rising land values, he said. Land value taxation would also fit in with the trend towards taxing enterprises that damage the environment, he suggested.

The research would not prescribe a specific form of taxation. 'We want to open up the discussion', he said. There would be questions such as what method of valuation to use and who should pay. He proposed the tax should apply only to business properties and that occupiers should pay, but should deduct the cost from their rents so that effectively the tax falls on landowners.

Delegates were sceptical. Charles Partridge said business rates are already very high, and further taxation would reduce rents, which would reduce landlords' incentive to invest in their property. Tom Dixon said site value rating would not fit well with the current system of non-domestic rating.
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