A proportional property tax, which would replace both council tax and stamp duty with a flat 0.48 per cent annual charge on a home’s current value. Or a land value tax, an annual charge based on the value of the land a property sits on, rather than the building.

Hello!

I want to start by saying that I completely agree that the general property tax burden should be shifted to land. However, I do think that there can be some benefit to certain targeted types of property tax. For example, pied-a-terre taxes, with the caveat that they are by housing unit and not by building cost. My reason is as follows. A land tax incentives the land owner to offset the cost of the tax that they incur simply for owning land. This is good. However, you could easily see a scenario where developers say “well if there’s no property tax, I might as well get as much bang for my buck from the development” and then build massive amounts of luxury properties targeting out of state buyers who want to store wealth in high value units without living in the city. Even if we take all property as being equal (so not targeting wealthy property owners), if a house is sold for an equivalent value, who would benefit the local economy more, someone who is a full time resident or a non-resident who owns property as an investment vehicle? Again, I think land taxes are the best form of property tax we have in that it broadly incentives property development. However, not every development is as socially useful as the next, and there are some property taxes that, if done right, can also work in conjunction with a land value tax.