Wednesday, 21 November 2012
Site Value Tax Videos
An alternative to property tax. Why landowners should pay an annual tax on the value of their sites. from Feasta on Vimeo.
Dave Wetzel retells the story of Robinson Crusoe to explain the nature of economic rent and why the state should collect it. from Feasta on Vimeo.
Tuesday, 20 November 2012
Site Value Tax Scoop.it Site
I curate a Scoop.it site on the topic of 'Site Value Tax'. The site covers the more common term 'Land Value Tax'. There is renewed interest in land issues around the world in the context of inequality and of protection of the environment and recently food scarcity. Land value tax (LVT) as a major reform idea got a new lease of life with the Green movement. It is seen by environmentalists as a vital part of Environmental Tax Reform (ETR) - of taxing bads not goods. Site/land value tax is also part of the new 'commons' movement agenda which demands that natural resources and social resources, which are essential for life, should be declared a special kind of property - commons property - and treated differently to private property or public property. Thirdly, site/land value taxation as a policy option has been given a new lease of life as part of the critical examination of unsustainable debt crisis. Site/land value tax is one of the recommended measures to prevent a property asset bubble and crash ever happening again, along with reform of the money system and better bank regulation.
Here is a link to the site. Site Value Tax http://www.scoop.it/t/land-site-value-tax. Enjoy!
Monday, 19 November 2012
A Petition for a Fairer Tax
Finance Minister, Michael Noonan: Stop the government imposing an unfair residential property tax in the 2013 Budget.
Policy makers, including the Finance Minister Michael Noonan, are preparing to implement an unfair residential property tax in the 2013 Budget.
SIGN HERE
This residential property tax will be collected on every home in Ireland. The rate you will pay, under this system, depends on the full value of your property including the building. The square footage, the number of bedrooms in your home, energy rating, are some examples of the features that assessors will use to set your taxation rate. Under this type of residential property tax, your payable tax will rise alongside any improvements you make to your home and garden. You will also pay more under this kind of property tax because the owners of development sites and zoned land are excluded.
There is an alternative, smarter and fairer tax system available, but the current government is not considering it. We are asking that this alternative be seriously considered before the 2013 Budget is implemented.
The alternative is called a Site Value Tax (SVT) and is based on land value alone.
The amenities available in a local area give zoned land and house sites their value. These amenities can include: sea views, nearby jobs, schools, public transport, shopping centres, good neighbours as well as the obvious infrastructure services of road access, connection to sewerage, water and electricity supplies. None of this value is created by the site owner but is created by nature and the broader community, both public and private. Site Value Tax is levied only on this unearned amenity value - never on the improvements made to the site by the current or previous owners. Those site owners with the most amenities, pay the highest tax. Those with the fewest amenities pay the least tax. That includes zoned land and development site owners where all of the property value is due to the amenities provided by the community. That makes it fair.
Benefits to the tax payer under Site Value Tax (SVT):
· Broadens the tax base therefore lowering the tax burden on homeowners by around 30%.
Enables reductions in tax for those who overpaid in the boom times.
Enables reductions in tax for those who overpaid in the boom times.
· Taxpayers can see what they get for their payment in terms of the amenities they enjoy.
· Does not penalise those who energy upgrade their homes - good for the environment and the construction industry.
· Is lower for apartment owners sharing a site than under a property tax - fairer as they also have to pay service charges.
· Encourages the development of unused and dilapidated properties - which is good for their neighbours.
· Encourages the renovation and letting of empty homes - thereby reducing rents by increasing supply.
· Actively discourages land hoarding and speculation by reducing windfall gains - directing investment to productive activities.
· Actively discourages lobbying and corruption in planning - and as a result, premature and excessive re –zoning
· Enables plan-led development - thus empowering residents in their local community.
· Steadies the cost of housing and keeps it affordable.
Benefits to the Government under Site Value Tax (SVT):
· Recovers value created by public investment in infrastructure and services without impacting on construction activity.
· Taxes the wealthiest in a way they cannot avoid - there is no clever loophole escape.
· Provides a steady known income to local government - better for sustainable planning.
· Easier, faster and less costly to implement than the proposed property tax because site values for each area are easy to assess compared to individual assessments of every home in the country
· With every property owner contributing their fair share, the government will be in a position to lower taxes on labour and transactions that are a drag on the economy.
The government has refused to engage in a public discussion of what kind of residential property tax we should have. They seem to think that Irish people would not be able to understand a Site Value Tax and will not notice that developers, speculators and bankers will get another bail-out under their property tax.
Prove them wrong!
Contact the Finance Minister, Michael Noonan, to express opposition to their property tax and demand a smarter and fairer tax system in the 2013 Budget.
Make our voices heard and influence the outcome - it is not too late. Sign this petition today and make your government work for you.
To:
Minister for Finance (Michael Noonan)
Minister for Finance (Michael Noonan)
Stop the government imposing an unfair residential property tax in the 2013 Budget. We want a fair Site Value Tax in it's place.
Sincerely,
[Your name]
[Your name]
SIGN HERE
Site value Tax far fairer than Residential Property Tax
Policy makers, including the Finance Minister Michael Noonan, are preparing to implement an unfair residential property tax in the 2013 Budget.
With only two weeks to the Budget, we propose that the government tear-up their plans for a residential property tax and implement the much fairer Site Valuation Tax (SVT) instead. Site Value Tax is a taxation reform included in the Irish government’s current Program for Government and the National Recovery Plan 2011-2014. It levies an annual charge on the value of all developed and undeveloped zoned land including the site under every building in residential use. It does not include un-zoned land i.e. agricultural land, forestry and peatlands. It does not include developed commercial property currently subject to local rates but it is expected that SVT will replace commercial rates in due course. It does however, include land zoned for commercial uses not currently subject to rates.
Research by Smart Taxes and other groups has shown that SVT has clear benefits over other kinds of property taxes from a number of perspectives; macro and micro-economic, environmental and social. It will assist local and central government to plan and develop effectively while providing a sustainable source of income.
What are the Economic Benefits?
Unlike other taxes, Site Value Tax does not impose a cost on economically beneficial activity, as VAT does on consumption or PRSI does on employment. Instead, it charges for the benefits of the land’s particular location, which is not created by individual land-owners. Location benefit comes from access to services, be they publicly-funded infrastructure and amenities (roads, schools, parks, etc.), or the community at large (shops, etc.). Site Value Tax enables the investment that creates this location benefit to be returned to the community rather than to the private land-owner.
Environmental Tax Reform - Stephen Reed from Digital Revolutionaries on Vimeo.
Site Value Tax FAQ
What is the Difference to a Property Tax?
Site Value Tax differs from a property tax in that the property tax is imposed on the value of a property (i.e. the building and the site), while Site Value Tax is based only on the value of the site or land in the property parcel. Land value derives from location and service access, meaning that, for instance, a site in a central location with good transport will pay more than a relatively isolated site. It would also apply to undeveloped zoned land, empty building sites and derelict sites.
What are the Economic Benefits?
Unlike other taxes, Site Value Tax does not impose a cost on economically beneficial activity, as VAT does on consumption or PRSI does on employment. Instead, it charges for the benefits of the land’s particular location, which is not created by individual land-owners. Location benefit comes from access to services, be they publicly-funded infrastructure and amenities (roads, schools, parks, etc.), or the community at large (shops, etc.). Site Value Tax enables the investment that creates this location benefit to be returned to the community rather than to the private land-owner.
In contrast to commercial rates or other property taxes, the investment of landowners to improve their property is not taxed. Site Value Tax recognises that this type of investment is productive, and should not be discouraged. What should be discouraged is unproductive activity such as land speculation. Since Site Value Tax taxes all zoned land, it discourages land hoarding and speculation.
Site Value Tax will also replace transaction taxes such as Stamp Duties, Development Levies and Part V type obligations. These are a barrier to the purchase and sale of land, which means that some land-owners will hold onto their land without being able to develop. Instead, we should encourage such landowners to sell their land if they are unable to develop profitably, and so create a clearer market in development land.
For more information on the economic benefits, see:
How Much Money Can it Raise?
Site Value Tax can earn over €1.8 Billion euro annually. See:
What are the Environmental Benefits?
Land is a finite resource. By imposing a charge on the ownership of land based on its market value, Site Value Tax discourages over-zoning and creates incentives for owners to use land as effectively as possible. This will ensure that land is used more efficiently in future and mitigate urban sprawl.
Land is a finite resource. By imposing a charge on the ownership of land based on its market value, Site Value Tax discourages over-zoning and creates incentives for owners to use land as effectively as possible. This will ensure that land is used more efficiently in future and mitigate urban sprawl.
For more on this topic, see the European Environmental Agency on why Site Value Tax is an effective environmental tax.
What are the Social Benefits?
Site Value Tax will encourage economic activity and will discourage the under-use and dereliction of properties. It will also provide a revenue stream for local and national government investment in public services. The tax will include temporary exemptions for homeowners who purchased their land at the height of the boom, while senior citizens will be able to defer payments until their home changes hands. The tax also helps infrastructure investment by allowing the government to capture the rise in land values caused by infrastructure creation. This prevents public expenditure serving to enrich private landowners at the expense of taxpayers.
Site Value Tax will encourage economic activity and will discourage the under-use and dereliction of properties. It will also provide a revenue stream for local and national government investment in public services. The tax will include temporary exemptions for homeowners who purchased their land at the height of the boom, while senior citizens will be able to defer payments until their home changes hands. The tax also helps infrastructure investment by allowing the government to capture the rise in land values caused by infrastructure creation. This prevents public expenditure serving to enrich private landowners at the expense of taxpayers.
Stephen Reed, former Mayor of Harrisburg, discusses the effect that Site Value Tax had upon the city’s economy:
Environmental Tax Reform - Stephen Reed from Digital Revolutionaries on Vimeo.
What Needs to be Done to Implement this Tax?
Smart Taxes has prepared a comprehensive report on the implementation of Site Value Tax. This report has been submitted, and includes a Roadmap, outlining the key steps to be taken. The steps are clear and straightforward. What is needed is political will. The necessary components for implementing this tax are outlined in the Smart Taxes documentsImplementation of Site Value Tax in Ireland and Site Value Tax – Budget 2011 Submission. As of April 2012, the most up-to-date implementation discussion is the Smart Taxes Submission to Property Tax Working Group.
Urban Forum Workshop
Much of the research and experience contributing to the Implementation Paper was derived from a workshop hosted by the Urban Forum Workshop. The papers and presentations that contributed to this can be found below.
William McCluskey, Introducing a Property Tax: The Northern Ireland Experience
Dr. W.P. Prendergast (DIT), SVT – The Information Implications
Joern Jensen, Development of the Danish Valuation System
Fred Harrison, Valuation and Implementation: The International Experience
Further Information
Dave Wetzel – Land Valuation Taxation
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