Does London need a land tax?
‘Tax Trial: Land Value Tax for London?’
New construction land is vital for new homes and London faces an acute shortage of developable areas. The report ‘Tax Trial: Land Value Tax for London?’  released today by London Assembly Member, Tom Copley, identifies that a new Land Value Tax (LVT) could provide the incentive to build over 200,000 new homes in the capital.
LVT is unlike any of the property taxes currently in use in the UK. It taxes land, and not buildings. Current tax and business rates are only imposed on occupied and developed land; which can discourage development. This means some sites in London, which could be used to meet housing needs, are being under-utilised as car parks or plots with long-demolished buildings.
The report recommends that the next Mayor look at the issue to identify what further devolved powers might be needed to make a Land Value Tax a reality, and then explore the potential of a Land Value Tax through a feasibility study and pilot scheme.
Author of the report for the Planning Committee, Tom Copley AM, said:
“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.
"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."
Notes to editors
- The report ‘Tax Trial: Land Value Tax for London?’ is below.
- On 17 September 2015, Members of the GLA Planning Committee recommended to the GLA Oversight Committee the appointment of Tom Copley AM as a rapporteur, to carry out an investigation into the cases for and against a Land Value Tax for London.
- Tom Copley AM, author of the report, is available for interview. See contact details below.
- In response to a call for evidence, a number of detailed expert written submissions were received, and the rapporteur conducted a series of meetings with experts in the period between October 2015 and January 2016.
- As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.