Land Value Taxation Campaign

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Home FAQ Forestry would become uneconomic under LVT

Forestry would become uneconomic under LVT

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"The reason why such asset taxes are a bad idea is because there is no obvious reason why the mere possession of an illiquid asset should correspond with ability to pay on an annual or any other periodic basis. Consider planting a forest for commercial timber for example. Each year, the value of the timber goes up, but according to you the owner should have to pay a tax on the rental value of the land every year - though goodness knows how you intend to assess that - even though he won't have any income from that forest for 30 years when the timber is ready to fell with which to pay the tax!

It is interesting how arguments against LVT have to invoke the hardest of cases. Yet this objection can be answered in a way that actually demonstrates the case for LVT very nicely.


Nobody plants timber commercially except on land which is close to the margin and therefore has minimal value. Even then, there is a revenue stream from, for example, shooting rights and other recreational uses, sale of thinnings, etc. The owner might even stock for eg venison and has an incentive to manage the woodland to maximise the revenue from these uses.

The question raises a further point. Today, in the absence of LVT, who would purchase land for the purpose of planting a crop that yielded nothing for several decades, and how would they pay for it?

As for valuation, forestry land is already valued for CGT purposes.
 

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