Sunday, March 23, 2008

Screw ’em!!

Ministers act against threat by developers to avoid new business rates

Mr Healey told The Times that his plans amounted to “zero tolerance on commercial vandalism” – and he specifically warned developers against damaging complete but unlet properties. “It would be an extreme step for a property owner to go to the lengths of deliberately vandalising their asset. I do not believe this is likely and I expect the property industry to adapt in a responsible manner.” This property downturn will be nasty and very long AAKGHAAH HAHHAHHA

Posted by confused76 @ 11:14 PM (1049 views)
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6 thoughts on “Screw ’em!!

  • mark wadsworth says:

    That’s what happens if you design a bad tax with stupid exemptions. If they went for a straight Site Value Rating aka Land Value Tax, it would not make any difference whether the site is undeveloped, part developed, finished or derelict. So all things being equal, there’d be every motivation to get the buildings finished off and let out, however low the rent.

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  • stillthinking says:

    This has already happened leading to ruined buildings (crofts) which you can still see the remains of hundred of years later. This must have happened several times in UK history because the last time was only in 1970, but my memory is of some historic tax many hundreds of years ago. Obviously it isn’t a successful attempt at taxation.

    http://www.localhistory.scit.wlv.ac.uk/articles/Darlaston/RecentTimes.htm

    “During the next decade the large companies disappeared one by one until a large part of the town became a derelict wasteland. The situation wasn’t helped by the fact that tax still had to be paid on empty useable buildings, and so the roofs were quickly removed as factories became empty, so avoiding the tax. This meant that the empty buildings quickly deteriorated, became unusable, and were demolished to leave an industrial wasteland.”

    If the roof must come off, then fair enough. How stupid of the government.

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  • stillthinking says:

    In what way is BTL not commercial property?

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  • Stillthinking

    BTL can be commercial property if the tenant or potential tenant uses it for commercial purposes.

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  • I figure that land value is tiny all over the UK, it is planning permission that holds all the value. Land around Oxfordshire with no planning permission and no potential to obtain planning permission costs a few grand – a large square of land 33 metres on a side well positioned for travel to Oxford and High Wycome for £25,000 – building a large house would only add £150,000 to that but the result would sell for £500,000 – what else would have gone into the equation to make up the missing £325,000? Planning permission. In a similar area, a tiny plot containing a lockup that had planning permission that lapsed recently is selling for £50,000 while empty land similarly sized without similar potential for a successful planning application costs £5,000.

    Since PPVT (planning permission value tax) would require valuing something which is illegal to buy and sell (it would be called bribery rather than trade), the distant approximation, LVT, is unlikely to work. Keep to taxing the inverse of the social value of the land use. This is close to LVT and similarly easy to administer, hard to avoid, but more closely reflects the loss of lifestyle value of locals due to the effect of the use to which land is put.

    It would be interesting to see the effect of one of those government Sunday “policy feelers” where they announce a study on relaxing the planning regulations in the green belt 🙂

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  • @Maihem – I’m really interested in your idea of taxing the inverse social value of the land use. I can’t find any information about this though – could you elaborate on what it involves? Is it known under another name? Do you know of any economists with research in this area? Thanks!

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