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The Greens' site value tax,a substitute for rates on property


patslatt

Well-known member
Joined
Apr 11, 2007
Messages
13,693
The Greens' site value tax agreed with Fine Fail in last week's negotiations is designed as a substitute to property tax or rates in order to prevent discouragement to development. Commercial rates are very high in some council areas,so developers must delay development,often for many years,until they can be assured of a return on investment. Since the site value tax applies to the sites instead of the developed structures on the sites,they will want to develop the sites ASAP to generate income and capital gains. The risk of developing will be reduced since there will be no additional rates or site value tax.

Existing land bank owners will be royally screwed by this unanticipatred site value tax which will reduce the value of their sites by up to 20% probably,if not more, in an illiquid market with few transactions.In addition to paying interest on loans to finance the land purchases where they have borrowed,they will also have to pay the site value taxes with no income coming in from the site. The envious will cheer but there are disadvantages for property development.

In many cases,developers have carefully accumulated land banks with a view to developing major projects. This accumulation has to proceed slowly over years to prevent holdouts on adjacent sites from demanding exorbitant prices to complete the development jigsaw. As I understand it,there is no provision in Irish law to allow a developer to get a compulsory purchase order on stubborn holdouts in order to complete land acquisitions for commercial developments. Without such a provision,who will have the deep pockets to fund taxed land sites? This could prove a massive barrier to property development and will concentrate the big projects among a few giants,possibly all British owned.

As for the land site tax on home owners,this will tend to encourage development of well designed houses whereas rates on houses can be a disincentive to good design because the more attractive the house,the higher the rates tend to be. In Rome in the 1980s,I was struck by the drabness of the exteriors of houses. It seems the interiors were often elaborate but the exteriors were kept drab to avoid the attention of the taxman.

The site value tax could help Dublin homeowners because valuations will tend to underestimate the value of the sites,which are often worth many times the value of the house structure in top locations.

There will also be a lot of disputes about valuations which will be good business for auctioneers. In basing tax on valuations derived from housing sales prices,calculations on the rateable value of structures must be subtracted from the selling prices of houses. Where the structures vary a lot in a given area,it will be difficult and expensive to provide reliable estimates of rateable values.
 

Jacob Richter

Member
Joined
Dec 13, 2008
Messages
6
Isn't this another term for Henry George's land value tax? Anyway, I see no problem in replacing the property tax with this one.
 

Squire Allworthy

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Joined
May 31, 2007
Messages
1,404
So you get taxed on the value of the land and not the value of the structures standing on it? Fair enough as rates are often a regressive form of taxation.

Initial thoughts are how do you arrive at that site value?

It is perfectly feasible for the land to be potentially worth more than the current structures sitting on the land. Say there is an area that is being widely redeveloped and densities increased will those who live in houses with gardens be forced to sell up and move because the value of their 'site' has rocketed?

What happens if land is rezoned and you don't want to sell the family farm?

Seems to me this is going to create a whole new industry just to collect and assess this tax. What is wrong with local income tax to pay for local services? Too easy?
 

Slippers

Member
Joined
Dec 9, 2007
Messages
76
What happens if land is rezoned and you don't want to sell the family farm?
It says non-agricultural land:

Starting with the necessary valuation and registration process, we will move to introduce a Site Valuation Tax for non-agricultural land. This system will provide a fair and stable basis for offsetting stamp duty on residential property.
Taxation for Sustainable Development, Page 4, Programme for Government

I don't know if land that is currently agricultural but has been zoned non-agricultural counts as agricultural or non-agricultural.

The Smart Taxes Network has a post about the Programme for Government here.
 

patslatt

Well-known member
Joined
Apr 11, 2007
Messages
13,693
So you get taxed on the value of the land and not the value of the structures standing on it? Fair enough as rates are often a regressive form of taxation.

Initial thoughts are how do you arrive at that site value?

It is perfectly feasible for the land to be potentially worth more than the current structures sitting on the land. Say there is an area that is being widely redeveloped and densities increased will those who live in houses with gardens be forced to sell up and move because the value of their 'site' has rocketed?

What happens if land is rezoned and you don't want to sell the family farm?

Seems to me this is going to create a whole new industry just to collect and assess this tax. What is wrong with local income tax to pay for local services? Too easy?
Income taxes affect productivity adversely as tax rates rise to levels perceived as unfair or confiscatory and discourage work and business activity.Marginal income taxes above 45% are too high for the Irish economy which advertises itself as tax friendly to attract multinationals and their managements and specialists and keep those already here from leaving. Recent budgets have pushed effective income taxes to 51%.

The seriously rich can always arrange their tax affairs to avoid taxes legally,either by investing in foreign businesses or by moving to a foreign domicile. The attempt by governments to collect more tax from them would only make the Irish tax code unnecessarily complicated,eroding a major competitive advantage of Ireland's business friendly tax system which encourages business investment.

As for rises in site value that push up the land value tax on people who can't afford it,that is unavoidable. The same problem would arise with rates on houses,for example if a low income area became gentrified with young professionals moving in and driving up house prices.

With farmland,the rezoning would make it too expensive for many farmers to pay the tax. If the 80% tax proposed by the Greens on selling rezoned land applied (it wasn't mentioned in the recent deal with Fianna Fail),this would amount to confiscation.

But there may be a loophole in the tax laws through which capitalism breathes,to quote economist Paul Samuelson. For example,the farmer may be able to avoid the 80% tax by keeping ownership of the land through leasing the land to a developer on a long term lease if the law permits. He could then exercise an option to sell the lease back to the developer either immediately or over time for a sum negotiated in advance.
 
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Supermanpolitician

Well-known member
Joined
May 8, 2007
Messages
1,033
Site Value Tax?

"And now the Greens are closing the stable door, though the horse has already bolted."
 

Slippers 2

Member
Joined
Nov 12, 2009
Messages
22
About a hundred people were there. It was mostly about convincing the audience that LVT is logistically and politically feasible rather than talking about Georgism. There were five speakers. Constantin Gurdgiev and the second speaker from Northern Ireland (I forget his name) were both entertaining.

Anyone else there?
 

ManOfReason

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Joined
May 24, 2007
Messages
4,328
Do they Greens have any policies that don't involve the government putting their greedy hand into our increasingly anorexic wallets?
 

SPN

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Joined
Feb 2, 2004
Messages
16,866
Do they Greens have any policies that don't involve the government putting their greedy hand into our increasingly anorexic wallets?
Local Government has been systematically underfunded for decades. We see this in our creaking water systems, our pot-holed roads, and our shabby public spaces.

The Greens have a policy to fund Local Authorities better, so that they can provide us with better services.

If you have a better idea for how we fund it, let's hear it.

..
.
 

Passer-by

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Joined
Feb 27, 2010
Messages
1,436
As a matter of interest, are there any plans to tax buildings (inversely) based on their energy efficiency ratings?
 

Mark.Keogh

Active member
Joined
Oct 9, 2006
Messages
154
Are you ready for property tax coz its a comin'

RTÉ News: Taoiseach defends handling of economy

This nice little guilt retribution exercise of Cowan's to turn the government's spinelessness back on the people with "the media made me mate 'da teflon tinker' do it" attitude to the removal/reintroduction of property tax is a nice piece of softening for building apathy and compliance on fighting a site valuation (property tax).

Gormless will be front man on this tax and headhunt the one off houses. "move back to town and rebuild your communities" will be rally cry.

Bend over everyone and take a bow/enema/minute for Europe.
 

DCon

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Joined
May 5, 2009
Messages
5,901
Local Government has been systematically underfunded for decades. We see this in our creaking water systems, our pot-holed roads, and our shabby public spaces.

The Greens have a policy to fund Local Authorities better, so that they can provide us with better services.

If you have a better idea for how we fund it, let's hear it.

..
.
If the government do not need to fund local authorities then general taxation should fall.

Have the Greens lobbied for this?
 
B

Boggle

If the government do not need to fund local authorities then general taxation should fall.

Have the Greens lobbied for this?
Don't the americans do this via local and national taxes (i.e. your taxes are a combination of both)?
Would such a system work here on a provincial basis? Take for example someone paying 25% tax overall - it could be split into 15% national and 10% local (infrastructure and management) taxes.

This would also give counties outside of dublin a chance to compete with dublin by reducing their tax.

Not sure it'd work here though as it's a bit messy. Maybe it's be better to scrap the local authorities altogether and operate via provincial authorities, funded out of direct taxation... Food for thought at least.
 

TradCat

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Joined
Jun 5, 2005
Messages
1,992
If you have paid stamp-duty on your property within the last ten years you should be exempt from the property tax. People paid up front with the stamp duty and should not be double taxed. They would all fall into the net eventually.

It should also be based on the land under the house and not the garden. People on corner sites in older estates can have very big gardens and it would be a bit unfair to slap a huge tax on them because of that. Many of them would be elderly.
 
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B

Boggle

If you have paid stamp-duty on your property withing the last ten years you should be exempt from the property tax. People paid up front with the stamp duty and should not be double taxed. They would all fall into the net eventually.

It should also be based on the land under the house and not the garden. People on corner sites in older estates can have very big gardens and it would be a bit unfair to slap a huge tax on them because of that. Many of them would be elderly.
People should just say no. Full stop. never.

Irish people do not want a property tax, and no amount of snake-oil salesmen will convince me its a good idea. Sometimes you listen to excuses - other times you have to just put your foot down.
 

Franzoni

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Joined
Mar 3, 2010
Messages
16,469
Do they Greens have any policies that don't involve the government putting their greedy hand into our increasingly anorexic wallets?
The greens are being set up as the fall guys at the next election by FF..their policies are becoming increasingly more and more right wing even more than the PD's if thats possible....i notice that when it comes to these hairbrained and ill thought out schemes that FF are cute to let Gormless or Ryan take the lead.... i heard there was discussion on taxing people with driveways or cobblelock in their gardens as this displaced rainwater from it's natural soakage and was putting the corpos system of drainage under pressure..i think their idea was to charage the homeowner for the upgrades to the system...

i think they will push and push until our backs are to the wall financally and when we eventually snap as we seem to do as a population every 100 years or so and the backlash will be very messy...
 

GJG

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Joined
Aug 10, 2006
Messages
3,111
Website
blog.hereshow.ie
Local Government has been systematically underfunded for decades. We see this in our creaking water systems, our pot-holed roads, and our shabby public spaces.

The Greens have a policy to fund Local Authorities better, so that they can provide us with better services.

If you have a better idea for how we fund it, let's hear it.

..
.
Everyone keeps saying this, without the slightest inclination to justify it. It simply isn't true. Local Government has an annual budget of about €11bn, about 20 per cent of the total. That is a vast amount given the tiny range of services they cover. They have had things like managing Health Boards and even the Taxi service taken from them in recent years because they did it so incompetently.

They can't even organise a simple task like compiling the electoral register. They are simply too small, and tiny populations like Leitrim (28k) simply can't contain the expertise to do all these tasks.

The problem is not underfunding, it is incompetence.
 

Franzoni

Well-known member
Joined
Mar 3, 2010
Messages
16,469
If you have paid stamp-duty on your property withing the last ten years you should be exempt from the property tax. People paid up front with the stamp duty and should not be double taxed. They would all fall into the net eventually.

It should also be based on the land under the house and not the garden. People on corner sites in older estates can have very big gardens and it would be a bit unfair to slap a huge tax on them because of that. Many of them would be elderly.
Not everyone owns the land under their house..i know i'm leasehold for the next 150 years,it was like that when i bought the property so who pays in that case..?..i have a legally binding contract with the lease holder for a set fee for the 150 years so he can't pass it on to me

Edit...BTW i agree with your post it wouldn't be right to pass it on to elderly people with big corner sites...some of my neighbours are in that position i was just pointing out the stupidity of the green partys proposal...ill thought out and the usual braindead claptrap we have come to expect from these morons who are fast running out of ideas...
 
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