Technically, the Crown owns the land. Everyone else owns an estate in this land. This distinction only really becomes important if you do something silly like die intestate (without a will) and without any heirs, in which case title reverts back to the Crown. Or if you find oil, gas or coal under your house in which case you don't get any of it. ;)
There's an argument that "real" in "real estate" doesn't mean "tangible", but comes from "royal" or "real" in Spanish, meaning the King ultimately owns all the land.
It would more likely come from French (in which "réal" meant "royal" in the past, see Montréal - Mount Royal) seeing how French influenced English legal terms and such.
This explanation makes more sense to me intuitively, as there is a lot of material stuff that is not "real estate", in fact majority of stuff that is material is not real estate.
This is one of the times I can say for sure that I know what I'm saying. A mix of improbable circumstances.
The funny thing about the link you share is that the two comments that offer the real answer are the least voted.
They explain why actions were called in rem (a demand related to possesions as opposed to in personam) and that real estate is refered to goods that you can't move, as opposed to furniture. Actually in Spanish real estate is "inmueble" while furniture is "mueble".
I think Hong Kong is also owned by the state...you can lease it for as long as 999 years. https://en.wikipedia.org/wiki/Government_rent_in_Hong_Kong but you do not own it. But in reality you own it and 999 years later you're related to half of the world (give or take :))
Let's not forget that for land in many countries, if a squatter uses your lad for xx years without being challenged, it is theirs. So it's recognized as different.
"With the exception of oil, gas, coal, gold and silver, the state does not own mineral rights in the UK. Generally minerals are held in private ownership, and information on mineral rights, where available, is held by the Land Registry together with details of land surface ownership."
- before the Crown, there were several crowns. England was composed of a handful of Anglo-Saxon petty kingdoms
- before that, it had an emperor. The Roman emperor.
- parts were ruled by the Danish (the Danelaw) and parts were ruled by the Saxons
- with regards to the UK, the political union is much younger than the union of crowns. The personal union was a Scottish king inheriting the English throne. The political union was the English parliament strong arming the Scottish.
- there was once a kingdom of Ireland until England had its way.
> there was once a kingdom of Ireland until England had its way
There was, but its king was the King of England (and later of Great Britain), and its parliament was subjugated to the parliament at Westminster, which could veto its acts and legislate directly for Ireland. It saw a brief period of autonomy towards the end of the eighteenth century, when its relationship with Britain became more akin to that between England and Scotland from the Union of the Crowns to the Act of Union; but after the United Irishmen revolt, Britain convinced the Parliament of Ireland, at least partly through bribery of its members, to abolish itself, and Ireland was formally absorbed into the UK.
Before the Kingdom of Ireland was the Lordship of Ireland, which was much the same, but with the King of England as Lord (rather than King) of Ireland, a title granted in 1154 by the first and only English pope, Adrian IV. (Henry VIII had himself declared King of Ireland after his breach with Rome, to quash the belief that the Pope was Ireland's ultimate sovereign.)
Before the Lordship there was a whole mass of kingdoms and sub-kingdoms (including the Kingdom of Dublin mentioned by ptaipale in a sibling to this comment), sometimes united under a High King, the most famous possibly being Brian Boru.
That’s an impressively comprehensive, concise and well-informed history of Ireland with regard to its various kingdoms. I only learned some of this history in the past two years and while I had learned that Henry II had received a papal mandate to conquer Ireland, I hadn’t realised until now that Adrian IV was actually English.
For some odd reason, I was sure there was an independent kingdom but clearly not. I think I've played too much Ck2 to remember my real history now. Thanks for that :)
Well, like I said, there was the High Kingship, but opinion seems to be divided on whether it represented a genuine political union, a confederation, a series of occasional and temporary alliances, a courtesy title for a "first among equals", a claim of supremacy not necessarily accepted by other Irish kings, or all of the above at different times. And at least some of its incumbents, especially the earlier ones, were entirely fictional.
I don't know how historically accurate they are, but they're relatively fast paced, fun to read and take place around the time where there were several kingdoms.
And there was also a Kingdom of Dublin, ruled by the Danes.
It lasted from 853 AD to 1171 when the Norman conquest finished it off -- in fact, this is a longer time than what the Acts of Union of England and Scotland have lasted so far.
The Saxons also came from area of modern Denmark, to fill the void left by collapsed Roman Britain, which was occupied by Celtic Britons (and Romans from other parts of the Empire)
There is a sixth century memorial stone in North Wales that uses consular dating: "The stone of ... son of Avitorius. In the time of Justinus the Consul." (Justinus was consul in Constantinople in 540 AD.)
This comment remind me of Michael Lewis's profile of Greece during the 2008 financial crisis...
http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-...
'The easiest way to cheat on one’s taxes was to insist on being paid in cash, and fail to provide a receipt for services. The easiest way to launder cash was to buy real estate. Conveniently for the black market—and alone among European countries—Greece has no working national land registry. “You have to know where the guy bought the land—the address—to trace it back to him,” says the collector. “And even then it’s all handwritten and hard to decipher.” ...Relationships with the rich and famous were essential in Vatopaidi’s pursuit of government grants and reparations for sackings, but also for the third prong of its new management’s strategy: real estate. By far the smartest thing Father Ephraim had done was go rummaging around in an old tower where they kept the Byzantine manuscripts, untouched for decades. Over the centuries Byzantine emperors and other rulers had deeded to Vatopaidi various tracts of land, mainly in modern-day Greece and Turkey. In the years before Ephraim arrived, the Greek government had clawed back much of this property, but there remained a title, bestowed in the 14th century by Emperor John V Palaiologos, to a lake in northern Greece. By the time Ephraim discovered the deed to the lake in Vatopaidi’s vaults, it had been designated a nature preserve by the Greek government. Then, in 1998, suddenly it wasn’t: someone had allowed the designation to lapse. Shortly thereafter, the monks were granted full title to the lake.'
...which they exchanged for government land at inflated value and then got into the bond market.
If you want a deep dive into Conspiracy Theory Territory, google for "Crown Temple" and read about how the "Crown Temple" controls the (regular) Crown and how it secretly owns the United States of America.
This is the case in Canada as well, if the buyer so chooses, just wrap it in a corporation. This way the government can pretend foreign buyers are 5% of the market and challenge anyone to prove them wrong, while more and more people who actually pay taxes but cannot afford to buy a home fall further behind.
The trick seems to be to have a shell company that owns the property and then buy and sell the company rather than the property - the Panama Papers are full of these kinds of shenanigans.
... or buy and sell options on that stock, so no actual change in ownership at all, (company or property) but rather just an exchange of contracts and obligations with a somewhat remote (and hard-to-prove) relationship with anything even remotely taxable.
There's a good precedent here for removing the charges. Until last year it cost £1-£2 for each company document that you wanted to download, but Companies House recently opened up the whole registry for free. They do just fine with the income that companies pay for registration, without needing the income from selling documents. I'm sure the Land Registry could do fine with the income from land registration (which are much higher than company registration fees) without needing to sell access to the documents.
Interestingly there was a line in the Tory manifesto about merging the relevant parts of Ordnance Survey, the Land Registry and so on to make a decent digital map of Britain that contains information about companies, land ownership, underground infrastructure etc.
I'm glad someone is finally doing it. The Tories have a pretty good track record on digital government (the gov.uk website is also great). Unfortunately that was the only clearly good thing I found in the manifesto.
It would be good if someone did that, but I'm finding it hard to imagine the Tories would be unusually motivated to make it happen - except possibly as another privatisable resource.
The current legislation is already supposed to make it impossible to own a company without being listed as a beneficial owner. It seems that in reality Companies House can sometimes be unexpectedly lax about forcing foreign-owned companies to comply with the law.
The current frontrunner for opacity is Scottish Limited Partnerships. Unfortunately fixing these is not within the capabilities of the Scottish Government.
The point made by the site is that because it costs £3 to look at each title document, it's not practical to see it at any scale. Sure you can find an individual property's ownership, but you can't search this in any way except by location, and you can't answer questions such as "who is the largest landowner in this area" or "what are the holdings of landowner x" without spending thousands on laboriously finding and buying each title. You can't even see the boundaries of each title unless you have bought the individual maps. You can just see a list of titles within a radius of a point, and then buy those titles to find out their extent. A secret doesn't need to be impossible to find to be closely-guarded, it can just be impractical.
That's not "closely-guarded". What you describe is not active guarding so much a characteristic of the antiquited data-retrieval system and the cost associated with manually serving information from that system.
Cite opposition to attempts to reform that system for a better one (that can be polled programatically for example), and then we can say that calling it "closely guarded" is accurate.
It's similar to calling the data contained in microfilm at your local library "closely-guarded". It's cumbersome to parse, yes. It's kept behind lock and guarded doors (when the library is closed), yes. But access is not reserved for those who meet security and/or idological criteral and vetting. There is no attempt to prevent the decemination of the information to others outside a vetted pool of privilaged users. What makes microfilm difficult to access is not it being closely guarded, but rather just that nobody's gone and digitized it — yet (If this is not true, then just image we're in the year 2007, or 1997). If people trying to digitize such material were hampered by active effort of the keepers of the microfilm because the said "keepers" didn't want the information available more broadly... then that would be "close-guarded". But that is not what's happening.
So yes, it's term is click bait. Or just bad, imprecise writing.
20% of the land records for England do not exist in any form at the Land Registry. I'd say that makes land ownership closely guarded - only the owner knows about it.
It isn't click bait. If you click through to the map and look at London, the owners are almost exclusively public sector or tax-evading shell companies in places like The British Virgin Islands, Panama, Jersey, The Isle Of Man, etc. None of these jurisdictions make company ownership records available, thus they can be considered secretly owned.
Although the registry is technically incomplete, this is not a significant issue.
As registration was introduced (as someone explains above, England is _old_) transfers are obliged to be registered, at first it was transfers for sale, but gradually other transfers were added. It is not possible, since registration was switched on for the last of England, to transfer real property without registering, the transfer is invalid if you try.
So, if the land isn't registered, that means it hasn't been transfered since registration began. You're talking about e.g. miles of empty wilderness that are owned by some old guy somewhere. THAT sort of thing isn't secret, everybody in the area will know who owns that "Oh, that's part of Lord Smith's estate. I expect his son manages it these days, of course the son is 73 so you don't see him about".
Because land is where the real power is and the establishment don't want you to know that. They tax income instead of land. They don't want the tide turning on rentiers.
This is wayy too close to the truth. Historically, the wealthy and elite have dis-proportionally been landowners. And unlike money or precious metals, land actually holds value pretty well and, most importantly, can easily be handed down generations.
> the wealthy and elite have dis-proportionally been landowners
I'd put that the other way around, saying the land owners have disproportionately ended up as the wealthy and powerful. The ownership of land and the huge unearned income derived from renting it to the masses looks more like cause than effect to me.
If you think people are wealthy and elite because they have got land, how do you explain how they got the land?
I think either they bought it from the Crown, because they were wealthy, or they were granted it from the Crown, because they were part of the elite and did something for the Crown.
Since you think it was the other way around, how do you explain how they got the land?
In the England at least, the system was roughly that the crown owned all the land through conquest (1066), then gave chunks of it to trusted nobles as a quid pro quo for fighting in the war that they just won. The nobles used the rent from these lands to maintain private armies which kept the peasants in check and the rent flowing, provided they raised an army on demand for the king as and when required.
There was no necessity to be wealthy first (although as you point out, this was often the case). Trouble is, if they were wealthy to start with, how did this happen? It just pushes the same question a bit further back. I suspect that in most cases, there are smaller conquests of local areas by a local family who gradually expand their reach, then lend military support to the king in exchange for being left alone.
Also, without the constant income the rents provide, you would not stay wealthy for long even if you had cash to start with, which is why land is so important. Getting money via trade and industry means you have to both be good at what you do and accept a profit margin which may vary depending on market conditions. Renting out land requires no skill and is impervious to competition. Constant cash flow forever with no effort. In order to accumulate serious wealth in the age before industrialisation, there was no better way.
In Marxist economics and preceding theories, the problem of primitive accumulation (also called previous accumulation, original accumulation) of capital concerns the origin of capital, and therefore of how class distinctions between possessors and non-possessors came to be.
Adam Smith's account of primitive-original accumulation depicted a peaceful process, in which some workers laboured more diligently than others and gradually built up wealth, eventually leaving the less diligent workers to accept living wages for their labour . Karl Marx rejected this explanation as "childishness," instead stating that, in the words of David Harvey, primitive accumulation "entailed taking land, say, enclosing it, and expelling a resident population to create a landless proletariat, and then releasing the land into the privatised mainstream of capital accumulation". This would be accomplished through violence, war, enslavement, and colonialism.
I don't endorse this theory but I thought it was relevant.
I find Marx theory more plausible in this case. It is well known that land and wealth has been acquired by expulsion of people from different faith from your territory (I'm thinking for example expulsion of Jews and Moors from Spain) or taking it from natives of new territories (America, Africa). Also I don't think that skill got you very far in Europe 200 years ago as a general rule. Once you have power you spend it on the things more important to you, for example, your descendants. You don't leave things to chance like natural born abilities.
>>It is well known that land and wealth has been acquired by expulsion of people from different faith from your territory (I'm thinking for example expulsion of Jews and Moors from Spain)
The problem with this line of argument is the land always belonged to somebody else first. The Moors took it from the Visigoths, who took it from the Roman Empire, who took it from Carthage, who took it from Celt-Iberian tribes that had been taking it from each other since time immemorial.
>>or taking it from natives of new territories (America, Africa)
Who were engaged in near constant tribal warfare against each other for the possession of territory. The Conquistadors had such an easy time toppling the Aztecs because two of their abused vassal states rose up in rebellion and joined the Spaniards (providing the bulk of Cortes' forces at one point). Africa's tribal kingdoms and regional empires show the same bloody history of conquest as any other region in the world.
Although it's certainly unsettling, one of the ever-present themes across human history is the legitimacy and endurance of conquest. Any attempt to challenge that legitimacy requires a coherent framework for dismantling the hierarchy and replacing it with a "fair" one (a fool's errand). This is precisely the task at which Marxism and its various Critical Theory descendants fail so spectacularly.
It's all well and good to say the current distribution of things is unjust and demands to be addressed. It's another thing entirely to actually do so "fairly" (and more importantly, peacefully). It seems to me far more likely that whatever agency or panel is authorized the enormous power necessary to affect such a change will inevitably abuse that power and merely replace the current hierarchy with a new one of their choosing. And the odds are that if mere government dictate could not accomplish it, they would resort to the same "violence, war, enslavement" that Marx was denouncing (i.e., conquering the conquerors). Friedrich Hayek put it this way: "Even the striving for equality by means of a directed economy can result only in an officially enforced inequality - an authoritarian determination of the status of each individual in the new hierarchical order."
I'm reminded of the thought experiment in Rawls' Theory of Justice that he calls the "veil of ignorance"[0]. In short: before individuals enter a society they are totally blind to their own place in it (race, class, gender, wealth, etc), like a randomized spawn in a game. They are then asked to deliberate on the distribution of rights and resources before entering the society. Rawls concludes that everyone would agree on the most equitable distribution because they cannot know who they will be in this new society (e.g., a lopsided society where most people are incredibly poor or enslaved is a huge gamble to take).
What Rawls doesn't do is take things a step further and imagine what that utopian society would be like in practice. Once everyone "spawns" in and begins living (pursuing opportunities, acting out passions, planning for the future, etc) there are guaranteed to be unequal outcomes when some are more successful/economically valued/powerful/attractive/politically manipulative/etc than others. Soon enough the once-equals have established a new hierarchy, as human societies tend to do, and we're back to square one.
Marx was wrong to call Smith "childish", especially when his own ideals are so naively hopeful. Even in a hypothetical world where one could implement a completely "fair" redistribution of possessions, once people begin exercising their will and making choices, inequalities will inevitably emerge and Smith's view of original accumulation would play out.
I think you read more in my comment that was written, probably because it's usually the beginning of a rant in favor of communism.
I don't share Marx's view on the solution, but my point is that he correctly addressed the problem. All the examples you gave about previous violence in conquered territories just strengthen the point that meritocracy and wealth had nothing in common.
Now, I actually believe strongly on personal merit and nowadays it can get you much further than before although I think we could do much better to give more similar chances to everyone at birth.
Very interesting post. This reminds of a passage in Asimov's memoirs where he informs Elie Wiesel that even Jews acted as oppressors during the single occurrence where they obtained significant political power. I recall reading that and suddenly being struck by a wave of melancholy.
Regarding Rawls, it seems as though the point is more to avoid a situation where there is a glut of people living truly miserable lives, such as the world we live in today. Inequalities are inevitable, but if almost everyone has a tolerable standard of living and there is no major dystopic framework in place it's no longer such a huge gamble to be born in this hypothetical world. It's definitely commendable to try to reduce the spectrum of inequality, or to redesign the system so that rent-seeking behavior no longer becomes problematic.
>If you think people are wealthy and elite because they have got land, how do you explain how they got the land?
By being given it by a state (which you have already said, in turn used force) or by forcefully taking it. It's primitive accumulation in the second instance and favouritism in the first. However both methods involve the creation of the concept of this type of property and further to take it, which requires as Proudhon put it, barbarism.
I think you're still making this argument in circles. Where do you get the men and weapons to take land by force if you aren't wealthy or part of the elite?
Great Britain is unusual in having had only one successful armed revolution in the past thousand years, and the resulting theocratic dictatorship was so bad it resulted in people demanding the monarchy back.
(The "glorious revolution" of 1688 contained no fighting, although it did involve foreign troops. There was a successful armed revolution in the United Kingdom of Great Britain and Ireland, but this was more of a decolonisation than a class-based revolution.)
You said revolt and now you're saying conquest which aren't the same thing. Of course the Crown got it by conquest. But nobody got land by armed revolt did they? Can you name any major land owning families in England that didn't start off by patronage? I can't think of any.
The Crown. You think the exchange of property has been politely arranged through the Land Registry since the first Brython clonked his annoying boss man on the head?
The trivially true answer is "by a variety of means" but obviously it's trends and patterns that are of real interest.
And this brings us close to studies of "social mobility" (glossing over the difference between class and wealth - which - taking a long perspective - can be assumed to be roughly synonymous).
And with social mobility between generations usually fairly low in general - the next most trivially true answer is "because their ancestors were".
Attempts to trace this back to some origin myth is slightly silly but on the whole your answer to the "where did it all begin" question indicates your political colour.
If you tend to answer "Because they stole it by force" then you're probably on the left. And if you tend to answer "Because they created a strong leadership that protected a group from other groups" that places you on the right.
Of course - pure examples of bandits vs noble warrior kings are rare but I suspect there's more of the former in history than the latter. ;-)
Yeah, one generation likely won a war for it, a few more probably had to pick the right sides during the various civil wars, but beyond that keeping land in your family doesn't take blood sweat and tears. It takes a little political bickering and lot of family infighting.
Property is included in inheritance tax, which is 40% of the total estate value over £325k (or £425k if you're smart about it). So big land owners do get hammered trying to pass it on down generations.
You can try and mitigate that by gifting to your children, but the tax free limit for that is only £3k per year and is still taxed if it's given less than 7 years before you die. Not really enough to do extensive property owners much good.
If this were the case, then we wouldn't still have aristocrats. Inheritance tax doesn't apply at this scale. They just put it in trust, even though no one seriously pretends that they don't control the money.
By using trusts does help highlight another aspect. The 'owners' are more like custodians of the estate, a historical institution to be kept running. Yes they do control it and clearly benefit from it but if you have a look at their spending and lifestyles compared to the new rich they are very different.
You can give any amount to your kids tax free ... if this is within 7 years of your death then Inheritance tax applies to amounts given over 3k per year (on a sliding scale). So works fine if you want to give away large amounts of assets long enough before you die.
If you want to give away property, then you have to make sure you don't continue living in the property rent-free for it to count for IHT.
As others have mentioned, serious estates just use trusts etc. instead.
IIRC, until relatively recently, it was more or less trivial for large estates to avoid most inheritance tax - put the property in a trust, and pass on the interest in the profit generated rather than the property per se.
I think the recent changes have made it more difficult to completely avoid inheritance tax, but a proper trust setup will drastically reduce it.
No rich people pay inheritance tax on property, you are leaving in a fairytale if you believe that. They have estate planners, and estate planners use trusts.
There are council taxes which are payed yearly (usually in monthly installments) depending on the value of the property these taxes average over a 1000 GBP a year for residential properties, (there are different schemes for businesses properties and agricultural land).
There is also a registration (stamp) tax any time you want to register a property in your name, these start on properties higher than 125K GBP however you would be very hard pressed to find anything beyond a parking space or a storage lot for that low in the UK.
On average when you purchase a property you will pay about 4% of it's value in tax.
So saying that there isn't a property tax in the UK is a bit of a stretch.
A property tax is levied yearly on the value of the land; council tax was once a fair approximation to one but the various freezes have caused it to veer far away from the actual fair market value of the properties. And of course, it's paid by the occupier, not the owner.
Not true in most U.S. real-estate markets (especially in cities), where rental prices bear very little relationship to costs to the landlord. Prices are set more by a mixture of demand and supply, where supply is more constrained by zoning and planning policy than by maintenance costs. Raising or lowering property taxes in that kind of market will raise or lower profit margins for the landlord, but not raise or lower the prevailing rental prices, which are already set as high as demand allows.
One way to verify that not even landlords believe this "pass on the costs" theory is to see what they lobby for. U.K. landlords are adamant in lobbying against any attempt to convert the council-tax system into a property-tax system, and California landlords strongly lobby against any modification to Proposition 13. If it were equivalent either way with all costs just paid by the renters, landlords wouldn't care enough to lobby.
If rental income is not sufficient to cover property tax and other property maintenance costs, the property either gets sold instead of leased, or the owner is speculating on an increase in the value of the property and just rents to slow the bleeding until the market is willing to pay the target sale price. Self-storage businesses are often used for the latter purpose. If you see a self-storage out in the middle of nowhere, it usually means that someone is betting that area will see a development boom soon.
Property tax hits all landlords in an area in roughly equal measure, so it establishes a rental price floor without any of the illegal and impractical forms of collusion. Rental prices below that floor generally do not exist unless some kind of funny business is going on, because few people are willing to operate a business that continuously loses money without some kind of plan for getting it into positive cash flow.
Later on, if property taxes increase by a marginal amount, rental prices may increase by less than that marginal amount, but they will also eventually cause the cheapest rents to exit the market, as the tax increase causes them to cross the boundary of profitability, so further into the future will increase the surviving rents due to contraction in supply, and possibly increase in demand, depending on what the property taxes get spent on.
As such, if you are a land-owner in the US, and own property that rents at above-median rates, it would benefit you to lobby the local government to increase property tax rates, improve the public school system, and invest in public infrastructure. This tends to force out your cheaper competition, who might then sell out to you or convert to condominiums, and attract new tenants willing to pay higher rents. Tax increases come out of your tenants' pockets. But if you are at the cheapest end of the rent scale, you would likely prefer to lobby for zoning and occupancy restrictions, and to keep property taxes low. Your tenants have a hard limit on what they can afford to pay, and so the tax increases come straight out of your pockets. So there are valid reasons for landlords to lobby, both for and against.
Not exactly, most rent contracts require you to register with the council and pay the tax bill but there is nothing that prevents the property owner from paying the bills for you.
If you rent via an all inclusive scheme then you are not liable for it personally.
As long as someone is paying the tax and no discounts (single occupancy, benefits etc.) are applied on the tax the council doesn't really care who and how many people live on the property.
Council Tax is more a general purpose local tax. It contains everything that in other countries would fall in various tax like municipal tax, local authority tax, recycling tax, driveway tax, ... and as such it is paid by the person living in the property, not the person owning the property (leaseholder or landlord).
Property tax would be taxing the landlord or at worst the leaseholder exclusively.
Technically true, but a given property is placed in a specific band based upon the value of the property.
The only real reason why this isn't a direct link is that the banding is not reassessed regularly.
I do know some people who successfully persuaded their local council to move their property to a lower-priced band based upon the alleged fall in property value..
In the US, the tax is attached to the property. In England, its attached to the occupant. The 15th Duke of Whatever with vacant land doesn't pay anything.
It has advantages and disadvantages. In my city, abandoned property often gets saddled with old tax liens and cannot be given away.
A yearly levy, based on a fair market valuation of the property (+ improvements), paid for by the landholder.
To put it another way, a property tax would be paid by the freeholder, not the leaseholder. This wouldn't make much of a difference for renters (as the owner would simply pass the cost on), but for owners of leasehold property it would be a stunning boon (and for freeholders who have sold the lease a disaster).
The fact that this county tax is paid by the leaseholder not the property owner is what was missing from the context. (And it boggles my mind why this is the case.)
England is run by landowners who are really hostile to the idea of property tax. The last big attempt at reforming the ancient "council rates" system in the 90s converted it to a per-person "Poll Tax". This was incredibly unpopular, widely boycotted, and resulted in riots. The system was dialled back to a system based on the value of the property in 1991, paid by the occupiers, with exemptions for students and empty properties, and a 25% discount for people living alone (mostly pensioners).
Empty properties are not always exempted. It's up to the council. Sometimes they are, sometimes there's a discount, sometimes there's no discount, sometimes people have to pay extra for empty properties.
Applying it to freeholders of very-long-lease property would be a fiasco for all those "99 year lease" properties that behave almost, but not quite, like freehold.
Lack of property tax doesn't prevent a free market from operating, and ideal free markets cause optimal utilization (which admittedly is not the same as maximal utilization, but then, why would you want the latter?)
Now stamp duty, that is something which prevents land in the UK from being optimally utilized.
Right, but I still don't understand what underutilization problem is solved by property tax that isn't already solved by the fact that you could sell your underutilized land and receive money — unless your goal is to increase utilization beyond what's efficient.
People aren't rational actors. This has been demonstrated in many econ experiments. Tax is a pain that is reoccurring. The government even reassess the value of your land periodically. Many people don't do this and may not know their land is underutilized. It is essentially a little nudge every year.
In this case, maximum utilization means maximum economic output, which is good for GDP and good for the country. It may not be the best for the local society, though. That part is hard to quantify and controversial.
Why are there abandoned buildings, parking lots and urban farms in downtown and near downtown neighborhoods in most US cities? I lived in a converted former warehouse that sat empty for decades because the owner had a dream that a factory would eventually rent the space again. It took the owner's death and his son inheriting the property for it to be put to "efficient use" again.
The Georgist argument is that the problem is property taxes aren't based solely on land value, and this creates excessive deadweight loss from taxation.
https://en.wikipedia.org/wiki/Georgism
Under a system of pure land value taxes, an empty lot downtown would be taxed at the same rate as the highrise next to it, and taxed much higher than an empty lot in the outskirts—a huge incentive to put that empty lot to more productive use.
The proliferation of parking lots is a regulatory/zoning issue.
Worthless property is worthless and the carrying cost is low.
If you have the capital, sitting on low value property can make you a lot of money.
Also, if you are a real estate investor, you can "launder" your profits to avoid taxes. That's why old shopping plazas will degrade until there is only a kung-fu place and a dollar store. It literally has a value sopping up real profits from thriving holdings with paper losses.
You pay less on a second home than the person next door. The "logic" is you are using less "services" but then that's not land value tax. You are occupying the land, there is an opportunity cost, you should pay full whack.
The UK is a total nightmare for this and the education level is very low especially in economics so any mention of it is met with "it's me house".
There are all sorts of exemptions. A common source of complaints is that it's possible to have a huge area of Scotland as grouse moor but not pay business rates on it.
No, properties are allocated to 'bands' (A-H, +I in Wales), and the rates set as a percentage of the 'D' band.
Generally, properties are assigned bands according to density/cost of providing services to an area: an area with a difficult garbage pickup route may get a higher band, or a place with more schools.
More typically, bands are allocated based on the ability of the occupiers to pay, and the funds are combined (reallocated) at the local authority level so that deprived areas can be subsidised by wealthy areas.
Council tax bands are based on the property's value on 1 April 1991 (a couple of years before it was introduced.) Within a local authority, the cost of providing services to a property does not effect the band.
Insofar as a house with lots of land attached will probably have a higher value, then yes. But not directly, and only for land that is within the curtilage of the residential property.
This seems really strange to me. Why should this be the case?
Some interesting information at their blog https://whoownsengland.org/2017/01/01/who-owns-england-what-... https://whoownsengland.org/2016/11/10/why-we-must-open-up-th...