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tomandlu

Lvt Question

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I'm sure this has come up before, but doesn't an LVT mean that poor people get driven out of areas as the areas improve - and they may have lived (and suffered) in such areas for years? Doesn't it just create rich and poor ghettos and a constant diaspora of the poor?

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Good question. But couldn't the poor (meaning low income) owners of the high-valued land could rent out the land to someone who makes productive use of it, and with the proceeds, rent somewhere neither ghetto-like nor palatial?

Just an idea - haven't given it that much thought!

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Good question. But couldn't the poor (meaning low income) owners of the high-valued land could rent out the land to someone who makes productive use of it, and with the proceeds, rent somewhere neither ghetto-like nor palatial?

Just an idea - haven't given it that much thought!

If they can profitably do that, then the whole point of LVT has failed (I think).

P.S. love your username...

Edited by tomandlu

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I'm sure this has come up before, but doesn't an LVT mean that poor people get driven out of areas as the areas improve - and they may have lived (and suffered) in such areas for years? Doesn't it just create rich and poor ghettos and a constant diaspora of the poor?

Yes this is exactly what happens. What you have to realise is that we already have a land-value tax.

In fact, beyond a few theoretical and fairly radical ideas, no-one really knows how to allocate land without a land-value tax.

So make one small change:

I'm sure this has come up before, but doesn't an LVT house prices and rent just mean that poor people get driven out of areas as the areas improve - and they may have lived (and suffered) in such areas for years? Doesn't it just create rich and poor ghettos and a constant diaspora of the poor?

and, oh look, it's the British economy.

Edited by (Blizzard)

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I'm sure this has come up before, but doesn't an LVT mean that poor people get driven out of areas as the areas improve - and they may have lived (and suffered) in such areas for years? Doesn't it just create rich and poor ghettos and a constant diaspora of the poor?

No - it means that the increase in house prices in areas that improve is limited - allowing the poor to afford to live there.

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No - it means that the increase in house prices in areas that improve is limited - allowing the poor to afford to live there.

Can you explain with a little more detail? Even if it acted as a brake on house prices, that's not much good to someone who lives in a poor area (with low LVT), who suddenly finds their LVT going through the roof due to general improvements to the area.

I was thinking that one way to limit the damage would be to say that the LVT on everyone's primary home would be frozen at the rate it was set when they bought the house (which will make the actual implementation complicated, but that's acceptable).

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*bump*

Is this really a problem that LVT advocates haven't considered and solved?

What problem? Yes that would probably happen sometimes. Well off people with commensurably large properties may well find the same thing if an area suddenly improves. Land speculation exacerbates this dramatically, though.

The idea that poor people generally won't be able to live in the nicest area under an LVT is probably correct, however it is also true under the current system only more so.

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The idea that poor people generally won't be able to live in the nicest area under an LVT is probably correct, however it is also true under the current system only more so.

The difference is, with LVT, they could be forced out, rather than just be unable to move in. Basically, it could act as an incentive for poor people to ensure that their area never improves.

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Well, Tomandlu, you are confusing a number of things. For a start, you have described "poor people" without indicating whether they are tenants or homeowners.

An LVT is an automatic mechanism to restrain roaring increases in prices. If that had been in place 10 years ago in London, it is hard to see the HPI boom having set in like it did. Tenants would be better off, as lower house prices reduce landlords' need to set rents high to cover high mortgage costs. New buyers would be better offer, as they would be able to buy in in a non-HPI scenario.

This leaves the final category - people who bought some time ago, who will have to pay a higher LVT (and especially people who bought before the LVT system was introduced).

These homeowners are for you "the poor". [Note: the real poor can't buy houses.]

It is true that they would not like to pay a higher LVT due to improvements in site valuations. To the extent that the LVT acts to counteract roaring uplifts in site valuations, the increase in the LVT would be limited too - but if the site valuations do rise significantly due to infrastructure developments and the like, they would be left paying more in LVT. Unlike new buyers, who would see the higher LVT offsetting what would have been higher prices, the older buyers have no choice to buy in now - they've already bought - so the consideration of what happens to the local land prices, whether up or down, doesn't help them, but they still have to pay the higher LVT.

You can effectively consider it like someone buying Southwark property after the crash of the early 1990s - only to see the Jubilee Line extended and an uplift in local property prices, one that would not have been entirely counteracted by a higher LVT.

But these "poor homeowners" are people who would otherwise have hoped to capitalise public spending on infrastructure in their areas into their property values, without doing a penny's worth of investment themselves.

If they're forced out by the LVT, I would say "let them be forced out rather than gift them a huge windfall from public infrastructure spending".

As homeowners in an LVT economy, they benefit from greater financial stability as the bubble risk to the banks of roaring land prices is reduced - which would probably keep their interest rates lower over the longer term.

The LVT should act to deter the nonsense that everyone should be buying freeholds they don't need. Average lifespans are only around 78 years - who needs a freehold stretching into the aeons ahead? We need to encourage longer leases. Five-year leases should be standard and not the phony 6-month assured shortholds that are designed to force everyone into the freehold market in the interests of the banks. So the real "poor" would benefit, and not be harmed by LVT, as they bought 5-year leases instead.

Edit: one solution is to set up financial vehicles for people (e.g. old ladies in houses bought donkeys' years ago) to pay their LVTs. The financial vehicles would pay their LVTs for them - allowing them to stay put without paying a penny in LVT - but the financial vehicles would reclaim the money on their deaths from the sale of the property. Effectively, there would no legacy to leave to relatives - the equity in the house would be taken by the finance company that covered their LVT during their lifetimes. What this HPI think often comes down to is scrounging heirs' attempts to get the taxpayer to guarantee them a legacy which amounts to the capitalisation of public investment in infrastructure. Time to stop the Land Fraud.

Edited by pjw

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Well, Tomandlu, you are confusing a number of things. For a start, you have described "poor people" without indicating whether they are tenants or homeowners.

Either/or, I suppose, although I was primarily thinking of owners who might have bought when housing was relatively cheap in a down-market area (e.g. Ladbroke Grove, W10, 30 years ago).

An LVT is an automatic mechanism to restrain roaring increases in prices. If that had been in place 10 years ago in London, it is hard to see the HPI boom having set in like it did. Tenants would be better off, as lower house prices reduce landlords' need to set rents high to cover high mortgage costs. New buyers would be better offer, as they would be able to buy in in a non-HPI scenario.

A better measure would have been to restrict high LTV mortgage lending IMHO, and I'm not convinced that rents reflect landlords' mortgage repayments...

This leaves the final category - people who bought some time ago, who will have to pay a higher LVT (and especially people who bought before the LVT system was introduced).

<snip>

If they're forced out by the LVT, I would say "let them be forced out rather than gift them a huge windfall from public infrastructure spending".

Hmmm... and if they liked where they were living and had no intention of moving (and it's hardly their fault that the value has shot up)? I dunno - I like the idea of LVT, but only as a means to an end. If the fallout is unreasonable, then I'd prefer to find a different means. Also, the introduction is going to be particularly fraught with these kind of repercussions. Perhaps freezing LVT to the price at the time of purchase (but only for a primary residence - and flipping would cause a reset) would make more sense. It should still act as a brake on high prices (when you sell, the new owner would be paying the new LVT rate - they wouldn't inherit the old one).

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Well, Tomandlu, your posts in this thread illustrate your refusal to think clearly.

1. Whether the "poor people" were tenants or homeowners was not an "either/or". An LVT would affect tenants, older homeowners who purchased years ago and newer FTBs differently. To fail to separate out these categories is sloppy thinking - a refusal to think - that can only make it harder to say anything worthwhile. Your further comments then illustrate you are talking about homeowners who purchased years ago. You need to think carefully and to know what you're thinking and saying before rushing to conclusions.

2. You say you're not convinced that rents reflect landlords' mortgage repayments. Once again, a typical refusal to think. For a start, I did not say they did. I said that higher prices increase landlords' need to set rents high - which is not the same thing as saying they can always achieve what they aim to charge. Logically - once again, look away, Tomandlu, now, as we're engaging our brains here - there is a hard maximum that people can pay. They can't pay more than 100% of disposable salary, and in fact they have to be able to afford food and clothing too. So people can't simply pay whatever the landlord wants. But high house prices do change the economics of BTL for a landlord, in that, if he takes out a BTL mortgage, he needs the rent to cover the mortgage, or he is making a loss. Tenants are also put at a disadvantage in an HPI scenario, as if they're priced out, more and more of them are in the rental market, making it harder for them to exert any pricing power.

3. You say high LTV mortgages should have been restricted. Why? In a free country, you should be free to borrow whatever a creditor will lend you. What you seem to be overly concerned about is to ensure that unearned gains are made by homeowners who capitalise infrastructure improvements (public spending) in their property values. Reading between the lines here, you have gained personally from public subsidy and want to make sure the gravy train continued.

4. "if they liked where they were living and had no intention of moving (and it's hardly their fault that the value has shot up)?" - then stay where they are and pay the LVT - as I pointed out finance packages could be made available to pay the LVT for them in their lifetimes to recover from the house equity on their deaths. It works for them - they can stay put without paying an LVT themselves as the finance company would pay it for them - but the heirs don't get to capitalise public spending into a fraudulent "legacy".

5. You like LVT, but only as a means to an end? No, you don't. You are hooked on subsidy and want to capitalise government spending, paid for by those who have nothing, into your property value. What about earning your own wealth in life and not conning those with nothing?

6. We've got to stop this game, the game you advocate, of drawing up all policies with the explicit aim of helping the well-heeled at the expense of the young. The idea that LVT should be "from now on" is nonsense. All homeowners are using land, which is a social resource, and should pay - regardless of the impact on those with wealth.

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Well, Tomandlu, your posts in this thread illustrate your refusal to think clearly.

Your posts illustrate that you are a condescending twit.

Never mind.

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Well, Tomandlu, you are confusing a number of things. For a start, you have described "poor people" without indicating whether they are tenants or homeowners.

An LVT is an automatic mechanism to restrain roaring increases in prices. If that had been in place 10 years ago in London, it is hard to see the HPI boom having set in like it did. Tenants would be better off, as lower house prices reduce landlords' need to set rents high to cover high mortgage costs. New buyers would be better offer, as they would be able to buy in in a non-HPI scenario.

This leaves the final category - people who bought some time ago, who will have to pay a higher LVT (and especially people who bought before the LVT system was introduced).

These homeowners are for you "the poor". [Note: the real poor can't buy houses.]

It is true that they would not like to pay a higher LVT due to improvements in site valuations. To the extent that the LVT acts to counteract roaring uplifts in site valuations, the increase in the LVT would be limited too - but if the site valuations do rise significantly due to infrastructure developments and the like, they would be left paying more in LVT. Unlike new buyers, who would see the higher LVT offsetting what would have been higher prices, the older buyers have no choice to buy in now - they've already bought - so the consideration of what happens to the local land prices, whether up or down, doesn't help them, but they still have to pay the higher LVT.

You can effectively consider it like someone buying Southwark property after the crash of the early 1990s - only to see the Jubilee Line extended and an uplift in local property prices, one that would not have been entirely counteracted by a higher LVT.

But these "poor homeowners" are people who would otherwise have hoped to capitalise public spending on infrastructure in their areas into their property values, without doing a penny's worth of investment themselves.

If they're forced out by the LVT, I would say "let them be forced out rather than gift them a huge windfall from public infrastructure spending".

As homeowners in an LVT economy, they benefit from greater financial stability as the bubble risk to the banks of roaring land prices is reduced - which would probably keep their interest rates lower over the longer term.

The LVT should act to deter the nonsense that everyone should be buying freeholds they don't need. Average lifespans are only around 78 years - who needs a freehold stretching into the aeons ahead? We need to encourage longer leases. Five-year leases should be standard and not the phony 6-month assured shortholds that are designed to force everyone into the freehold market in the interests of the banks. So the real "poor" would benefit, and not be harmed by LVT, as they bought 5-year leases instead.

Edit: one solution is to set up financial vehicles for people (e.g. old ladies in houses bought donkeys' years ago) to pay their LVTs. The financial vehicles would pay their LVTs for them - allowing them to stay put without paying a penny in LVT - but the financial vehicles would reclaim the money on their deaths from the sale of the property. Effectively, there would no legacy to leave to relatives - the equity in the house would be taken by the finance company that covered their LVT during their lifetimes. What this HPI think often comes down to is scrounging heirs' attempts to get the taxpayer to guarantee them a legacy which amounts to the capitalisation of public investment in infrastructure. Time to stop the Land Fraud.

WOW!

Clearly a well thought out post but would you have been able to share this information without being so rude?

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*bump*

Is this really a problem that LVT advocates haven't considered and solved?

To expand upon my previous answer (since you obviously weren't convinced):

Rents already force people to move on as areas improve. House-prices do the same, it's just that they operate on generational time-scales.

Some lucky people can hide from this by buying land when it's cheap, but all that really does is pass the cost onto someone else.

Often that will be someone poorer.

When rent rises force tenants to move from an area, or house-prices prevent people from moving to an area, those people are left with nothing. Anything less than a 100% LVT means that a home-owner who is forced to sell by price rises, will sell at a profit. They get to keep a fraction of the price rise.

LVT isn't supposed to protect people from rising land-costs, it is designed to make everyone pay for their own land costs regardless of who they are, and when or where they were born. The real question, the thing that really determines who benefits and who loses, is how the money raised is spent.

Anyway, the really massive house-price/rent rises aren't due to local improvements or growth, but to the illusion of growth caused by debt bubbles. LVT should help prevent this, making it easier to live with the more slowly rising costs.

Edited by (Blizzard)

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To expand upon my previous answer (since you obviously weren't convinced):

...

Anyway, the really massive house-price/rent rises aren't due to local improvements or growth, but to the illusion of growth caused by debt bubbles. LVT should help prevent this, making it easier to live with the more slowly rising costs.

Thanks. It also occurs to me that the mix of property types in an area may mean that the less well-off are not entirely driven from any area with decent service-provision (e.g. a small flat vs a large detached).

Moving on, what is the exact mechanism inherent in LVT that prevents speculation if we don't limit LTV (loan to value - damn these similar acronyms)?

That aside, if we want to prevent land speculation, wouldn't a 100% CGT (inflation linked and recognising genuine improvements) on the sale of the property be a more direct solution? (which wouldn't necessarily exclude a role for a progressive LVT to prevent rent-seeking and hoarding). I still think you might want to rein in LTV, or you just encourage 'aspirational' bubbles (although they'd be more limited than speculative ones).

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The "exact mechanism" to prevent speculation - and I'm spelling things out here - is that the higher the prices go, the higher the LVT, and the less desirable the location.

A 100% CGT would not be as good, because an annual levy has more of a role in deterring HPI. A CGT at the end of a property holding could be put off in the owner's mind, but an annual levy is more insistent - it forces itself on the consciousness. But MORE IMPORTANTLY a 100% CGT would deter transactions - and the whole point of the LVT is to ensure efficient use of social land resources, which requires low transaction costs, not high ones. A 100% CGT encourages land hoarding.

Of course anti-HPI policies need to be many pronged. I wouldn't ban high LTV, but I would ban high LTI (loan to income - I would peg it at a max of 3 times one person's salary) - but this would force a mega crash on the market. Also - make all mortgages non-recourse. We need policy after policy after policy to hit the market for six.

Edited by pjw

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The "exact mechanism" to prevent speculation - and I'm spelling things out here - is that the higher the prices go, the higher the LVT, and the less desirable the location.

But we face a failure of that assumption already. London, with its high costs ought to be turning into a ghost town. Speculators may capitalise on people's desire to live in London, but that desire is not based on speculation.

Moving on, how does this impact on rentals and BTL? If the LVT cost is passed onto the renter (which it must be), then there's still potential for speculation (if the rent is LVT + X, I would suggest that X is going to be a percentage of LVT, rather than a fixed /sq foot amount).

Is there an assumption that LVT is progressive or is it one-size-fits-all? The former sounds a better fit, since otherwise it would hit those on lower incomes disproportionally afaict.

A 100% CGT would not be as good, because an annual levy has more of a role in deterring HPI. A CGT at the end of a property holding could be put off in the owner's mind, but an annual levy is more insistent - it forces itself on the consciousness. But MORE IMPORTANTLY a 100% CGT would deter transactions - and the whole point of the LVT is to ensure efficient use of social land resources, which requires low transaction costs, not high ones. A 100% CGT encourages land hoarding.

Which is why I suggested it should be used alongside LVT. LVT would, in this scenario, primarily exist to discourage hoarding.

Of course anti-HPI policies need to be many pronged. I wouldn't ban high LTV, but I would ban high LTI (loan to income - I would peg it at a max of 3 times one person's salary) - but this would force a mega crash on the market. Also - make all mortgages non-recourse. We need policy after policy after policy to hit the market for six.

I understand the distinction between LTV and LTI, but aren't they just different ways of doing largely the same thing? (and if someone with a high income cannot raise a decent deposit - congratulations, you've just sold a house to Kerry Katona). Personally, a little of both seems appropriate. Also, yes for non-recourse.

You seem to have formed the impression that I'm against LVT - I'm not, and have spoken up in support of it on these forums on numerous occasions - but my support is mainly based on it being a fairer form of taxation. Clearly, it also has a role in preventing land speculation and disastrous bubbles, but I see it as one of a basket of tools, rather than the primary weapon.

  • LVT as a tax-raising measure and to discourage hoarding of land

  • High CGT to dampen speculative purchases (genuine improvements and development excluded, otherwise house builders would just pack up their bags and go home)

  • Strict LTV and LTI criteria to prevent non-speculative bubbles as people seek to move into the most desirable areas

  • Reform of the planning process, because the current one is terrible

  • All mortgages should be non-recourse - that should concentrate lenders' minds a bit

  • Reform of banking - lying about the rating of mortgage tranches before selling them on removes moral hazard

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Thanks. It also occurs to me that the mix of property types in an area may mean that the less well-off are not entirely driven from any area with decent service-provision (e.g. a small flat vs a large detached).

Yes, when we talk about being forced to move it might mean either away from an area or to a smaller house in an area.

As before, this is no different to what happens already, because LVT doesn't primarily change what is paid for land,

it changes who is paid.

Do we want to pay a Chinese speculator or our own government?

Moving on, what is the exact mechanism inherent in LVT that prevents speculation if we don't limit LTV (loan to value - damn these similar acronyms)?

With a land-value tax, land isn't as desirable. If you rent it out, a fraction of the rent goes to central government. If you don't rent it, then you have to budget for a lifetime of tax payments.

Either way, you won't want to pay as much for it.

That pushes down the up-front cost.

It also pushes down the overall cost, because it removes parasitical demand.

If parasites have to pay their costs of hoarding, and cannot push them onto other people, then their 'business' model collapses.

Of course, this depends on how high you set the LVT.

That aside, if we want to prevent land speculation, wouldn't a 100% CGT (inflation linked and recognising genuine improvements) on the sale of the property be a more direct solution? (which wouldn't necessarily exclude a role for a progressive LVT to prevent rent-seeking and hoarding).

No. CGT just discourages people from selling, and encourages hoarding.

If you are granted exclusive use of some land, that imposes an ongoing cost on the rest of us. CGT doesn't reflect that cost. Land-value tax does.

It is an attempt to mimic outcome of a true free-market for land, which would be the most economically efficient, fairest way of allocating a scarce resource, but may not actually be viable in reality for various reasons.

Any other tax proposal or gimmick will lead to inefficiency and economic loss.

I still think you might want to rein in LTV, or you just encourage 'aspirational' bubbles (although they'd be more limited than speculative ones).

Set at a high enough level, land-value tax should prevent any bubbles on its own.

You probably can't set it at such a level for political and practical reasons, so I think caps on mortgage lending are a good idea.

A strict cap on lending without a land-value tax risks having all the housing bought up by wealthy landlords who don't need funding. So effectively we'd all be paying our LVT to a Chinese billionaire.

Land-value tax isn't the only thing that needs to be done to fix the economy, it's just the first thing that needs to be done.

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*bump*

Is this really a problem that LVT advocates haven't considered and solved?

Take a look at my distributed land license thread in my sig. This approach is more sympathetic to this point.

At the end of the day, we don't want people rent seeking and that is all. LVT seems overly aggressive in this regard, IMO.

Edited by Traktion

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"We face a failure of that assumption already" - no, we don't. You are constantly arguing for public subsidy for landowners, which is what underlies all yoru posts. I'm spelling things out here - speculators who buy property in London do not face higher and higher annual LVT payments as prices go up. Who knew?

"If the LVT cost is passed onto the renter (which it must be)": once again, a typical refusal to think, evident in all tomandlu's posts. The landlord cannot pass all his costs on automatically, as there is a maximum above which people cannot go - cannot, not will not. To argue that all costs can always be fully passed on is to argue that a BTL landlord's business plan MUST always be viable. But there are landlords who lose money. Who knew?

"You seem to have formed the impression that I'm against LVT - I'm not, and have spoken up in support of it on these forums on numerous occasions" - I'm not sure about your position on it yet.

"Genuine improvements and development excluded" - for the umpteenth time, a site valuation tax is about the location, not genuine investments to improve the land. The LVT is levied on the unimproved value of the land. A house with a huge conservatory and an empty plot of land next door get the same LVT (assuming the same acreage).

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pjw, I don't know if you are this much of a twit in real life, but the old adage "you catch more flies with honey than vinegar" might be worth ruminating on.

"We face a failure of that assumption already" - no, we don't. You are constantly arguing for public subsidy for landowners, which is what underlies all yoru posts. I'm spelling things out here - speculators who buy property in London do not face higher and higher annual LVT payments as prices go up. Who knew?

Where on earth am I arguing for a public subsidy for landowners? And we do face a failure - people are still choosing to rent in London and the SE, despite the high prices. Since these people have no vested interest in rising prices (quite the opposite), why do you conclude that a high LVT would have a different outcome on its own?

"If the LVT cost is passed onto the renter (which it must be)": once again, a typical refusal to think, evident in all tomandlu's posts. The landlord cannot pass all his costs on automatically, as there is a maximum above which people cannot go - cannot, not will not. To argue that all costs can always be fully passed on is to argue that a BTL landlord's business plan MUST always be viable. But there are landlords who lose money. Who knew?

It should be obvious that, eventually, one meets a limit in the rent you can charge. I am merely making the point that a landlord MUST include LVT in the rental cost, or he will go bust. If the LVT is too high, so that he can't find any renters at a price that allows him to survive (and I'm assuming that the landlord owns the property outright), then it's too high in general. If it's not too high, then it has little impact on the landlord, since he's passing it on.

"You seem to have formed the impression that I'm against LVT - I'm not, and have spoken up in support of it on these forums on numerous occasions" - I'm not sure about your position on it yet.

But sure enough to be a rude, arrogant and condescending?

"Genuine improvements and development excluded" - for the umpteenth time, a site valuation tax is about the location, not genuine investments to improve the land. The LVT is levied on the unimproved value of the land. A house with a huge conservatory and an empty plot of land next door get the same LVT (assuming the same acreage).

I was talking about CGT, but apart from that...

You really are a dick BTW.

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1. Rents falling in London now - people don't simply pay what landlords want. They're hard up again the maximum possible already - and a lot of that is facilitated by in-work benefits to keep the property ponzi going.

2. So what if the landlord goes bust? If he does, he will have to sell up at a loss - and thus feed the HPc! The whole point of the LVT is underlined if landlords go bust! Bring it on!!!

3. Clearly, what is a profitable rent depends on what price the landlord bought the property at and with what mortgage.

4. You're assuming landlords own the properties outright - and that they are not leveraging their pot of money to get as many mortgages paid off by tenants as they can. I suppose landlords with no head for business might do that - but those who want to get rich will, instead of buying one outright, buy 4 on 25% BTL mortgages.

5. LVT has a huge impact on landlords, as some areas would have high LVTs and others lowish ones, for equivalent properties. As the LVT goes up and up, the pool of willing people who want to live in Kensington and not Newham declines and declines, as the landlord will ***try*** to pass on the tax (which is his tax, and not the tenant's).

Edited by pjw

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1. Rents falling in London now - people don't simply pay what landlords want. They're hard up again the maximum possible already - and a lot of that is facilitated by in-work benefits to keep the property ponzi going.

Not round here, they're not (unfortunately). As a London renter, I live in hope.

2. So what if the landlord goes bust? If he does, he will have to sell up at a loss - and thus feed the HPc! The whole point of the LVT is underlined if landlords go bust! Bring it on!!!

3. Clearly, what is a profitable rent depends on what price the landlord bought the property at and with what mortgage.

4. You're assuming landlords own the properties outright - and that they are not leveraging their pot of money to get as many mortgages paid off by tenants as they can. I suppose landlords with no head for business might do that - but those who want to get rich will, instead of buying one outright, buy 4 on 25% BTL mortgages.

5. LVT has a huge impact on landlords, as some areas would have high LVTs and others lowish ones, for equivalent properties. As the LVT goes up and up, the pool of willing people who want to live in Kensington and not Newham declines and declines, as the landlord will ***try*** to pass on the tax (which is his tax, and not the tenant's).

Lumping these together... I am of the belief that rentals are a valid part of an overall housing environment (renting can and does suit many situations - both financial and practical), ergo being a landlord should not be automatically a path to bankruptcy...

Moving on... I'm assuming nothing - I just don't have a lot of sympathy for highly-leveraged landlords who've bought up properties to then rent to the people who would have bought them if the landlord hadn't exploited the situation.

Being a landlord who outright owns the property should be viable (with the caveat that one would expect a healthy balance between rentals and OOs in all areas, although the ratio may well not be constant across them). Needless to say, you can't replace every high LTV BTLer with a cash-buyer, so that removes some speculative steam from the market, as well as freeing up more houses for potential OOs.

Question regarding point 5 - if the value of a particular area means that LVT becomes so unaffordable that the area starts to depopulate and you start getting empty housing, how does the LVT adjust to counter this? Would the LVT fall as shops and service-providers closed and/or moved out, or is there some other mechanism? Essentially, what metrics do we base LVT on? The principle - the rental value of the unimproved land - sounds simple enough, but in many urban areas there simply isn't a meaningful market for such a thing.

In addition, there are aspect of 'value' relating to houses and areas that do not necessarily represent an objective metric. Is LVT in any way affected by the price someone is willing to pay? If rich people colonised a low LVT area (buying out - and outbidding - those on lower incomes), would LVT rise irrespective of any improvements? I can see smart money moving into gated communities in poor areas...

Finally, and I've sort-of touched on this, doesn't LVT create an incentive for people to resist anything that would improve the area? (or even actively degrade it).

I remain a supporter of LVT - both as a better system of taxation and as a tool against over-speculation in housing. However, I also remain highly sceptical that LVT alone is enough, or even the primary tool, against such over-speculation. Lending criteria is the main driver IMHO. In addition, LVT may well create some odd and perverse incentives if we're not careful. It's no magic-wand.

To my previous list of suggested measures, I'd add that mortgages should not be available for BTL or second properties (cash only), with no transfer of an OO mortgage to a BTL one allowed.

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