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Annex A
Calculation of land value tax rates referred to in figure 11.1
Figure 11.1 is an updated version of a table produced for the Committee by the Henry George Foundation. It estimates potential bills per household in 2006-07, were a land value tax in operation now.
The figures should be read with care. In particular:
a. House prices are still based on 1991 values;
b. Median values within each council tax band are used for the purposes of these calculations; and
c. Estimates for converting median capital values into median land values have been achieved through the use of land:building ratios provided to us by the Henry George Foundation. These ratios have been interpolated from a curve produced by the Foundation, with the assistance of someone they refer to as "a director of a national UK firm of surveyors specialising in land valuation". We have no evidence which either supports or challenges these ratios.
[1] | [2] | [3] | [4] | [5] | [6] | [7] | [8] | [9] |
|---|
Council Tax Band | Land: Building Ratio | Median Property Value (1991) (£) | Land Value Allocation (1991) (£) | Number Of Households (Sept. 2005) (000s) | Band Global Land Value (£m) | Band's % Of Total Land Value | Total Required From Band (£m) | Average LVT Bill |
|---|
A | 25:75 | 20,000 | 5,000 | 536 | 2,680 | 6.2 | 136.0 | 254 |
|---|
B | 34:66 | 31,000 | 10,540 | 562 | 5,923 | 13.6 | 298.3 | 531 |
|---|
C | 38:62 | 40,000 | 15,200 | 362 | 5,502 | 12.7 | 278.6 | 770 |
|---|
D | 40:60 | 51,500 | 20,600 | 283 | 5,830 | 13.4 | 293.9 | 1,039 |
|---|
E | 42:58 | 69,000 | 28,900 | 291 | 8,410 | 19.4 | 425.6 | 1,463 |
|---|
F | 44:56 | 93,000 | 40,900 | 154 | 6,299 | 14.5 | 318.1 | 2,066 |
|---|
G | 46:54 | 159,000 | 73,190 | 100 | 7,319 | 16.9 | 370.7 | 3,707 |
|---|
H | 50:50 | 265,000 | 130,250 | 11 | 1,433 | 3.3 | 72.4 | 6,582 |
|---|
Totals | 2,299 | 43,396 | 100.0 | 2,193.6 | |
|---|
Explanation of Calculations for Table:
[2] Ratios on the average relative values of land and buildings within properties in each council, provided by the Henry George Foundation
[3] Median point within each band at 1991 values (assumptions made for bands A and H)
[4] [2] x [3]
[5] Number of households in each council tax band
[6] [4] x [5]
[7] The figure for each band in [6] as a percentage of the total for [6] (43,396)
[8] £2,194 million x [7]. £2,194 million is the estimated total council tax yield in 2006-07, calculated as the number of Band D equivalent properties in Scotland in September 2005 (1,942,933), multiplied by the Scotland average Band D council tax for 2006-07 (£1,129).
[9] [8] / [5]
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