It would reduce speculation and release land for development more timeously
19 September 2024 - 04:00
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Land value tax is not mentioned as an extra means of raising revenue in Claire Bisseker’s article “A Tax Net Trawling Fished-out Seas” (Features, September 5-11). All present levies on land and property, except the municipal rates, are to do with the transfer of property from one owner to another.
Land, with or without built development on it, and with or without development rights under use zoning rules, can be bought as a speculation, in anticipation of an increase in value, either through changes to zoning rules or the coming of built development nearby, especially in conjunction with improved transport infrastructure.
The way existing municipal valuations are carried out might not reflect these changes, as the bought land itself either remains undeveloped, or has no application for planning permission to build on it. Were the owners then to sell, they would doubtless reap a handsome profit, on which the various levies would be applied. But what if they just sit on the land, simply to continue increasing the eventual likely sale price?
There should be a means for the public purse to garner an element of this increase in value, and that is land value tax. It should also reduce speculation, and release land for development more timeously. Ireland, for one, has now introduced such a tax.
ADH Leishman Cape Town
The FM welcomes concise letters from readers. They can be sent to fmmail@fm.co.za
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Let’s have a land value tax
It would reduce speculation and release land for development more timeously
Land value tax is not mentioned as an extra means of raising revenue in Claire Bisseker’s article “A Tax Net Trawling Fished-out Seas” (Features, September 5-11). All present levies on land and property, except the municipal rates, are to do with the transfer of property from one owner to another.
Land, with or without built development on it, and with or without development rights under use zoning rules, can be bought as a speculation, in anticipation of an increase in value, either through changes to zoning rules or the coming of built development nearby, especially in conjunction with improved transport infrastructure.
The way existing municipal valuations are carried out might not reflect these changes, as the bought land itself either remains undeveloped, or has no application for planning permission to build on it. Were the owners then to sell, they would doubtless reap a handsome profit, on which the various levies would be applied. But what if they just sit on the land, simply to continue increasing the eventual likely sale price?
There should be a means for the public purse to garner an element of this increase in value, and that is land value tax. It should also reduce speculation, and release land for development more timeously. Ireland, for one, has now introduced such a tax.
ADH Leishman
Cape Town
The FM welcomes concise letters from readers. They can be sent to fmmail@fm.co.za
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