Land tax reform can aid growth

A reform of the way in which Scotland taxes land - with an emphasis on the role of land values - has been recommended to the Scottish Government as a route to economic recovery and delivering on its land policies.

Making the recommendation, the Scottish Land Commission said that while 50 pedr cent of the UK’s wealth was tied up in land and property, it only accounted for around 10 ten per cent of the total tax base.

On the emerging carbon and natural capital markets, the Commission recommended that taxation should be used to ensure public as well as private benefit emerged from future carbon values.

The Commission said that identifying changes to the tax system could help regenerate town centres, ensure that the move to net zero was a just transition, deliver wider benefits for local communities, and support a more diverse pattern of land ownership.

However responding to the recommendations, Scottish Land and Estates warned that any amendments to taxation systems had to be thought through with great care:

“Introducing tax measures in order to promote land reform would run the risk of damaging the substantial benefits rural businesses already create – not to mention the considerable tax and rates that are already paid by these companies,” said the organisation’s chief executive, Sarah-Jane Laing.

And, raising the spectre of the sporting rate exercise, she said that bringing all land onto the valuation roll for non-domestic rates would be a mammoth exercise to complete – which would see Scotland’s farming businesses caught up in a mountain of red tape even if there were no plans to charge rates at present.