Response to the Land Reform Policy Group Consultation Document

Wednesday, 22 April 1998 17:53
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"IDENTIFYING THE PROBLEMS"
 

April 1998




CONTENTS


    I    INTRODUCTION
    II    ANSWERS TO THE QUESTIONS
    III    GENERAL BACKGROUND CONSIDERATIONS
    IV    FURTHER COMMENTS ON SPECIFIC POINTS RAISED THE REPORT
    V    APPENDICES
        APPENDIX 1 - DEFINITION OF LAND VALUE TAXATION
        APPENDIX 2 - DEFINITION OF LAND VALUE

PART I
ABOUT THE LAND VALUE TAXATION CAMPAIGN

    The Land Value Taxation Campaign is a non-party organisation
    which was established with the aim of securing legislation
    which would fundamentally change the basis of public revenue
    in the United Kingdom. It proposes that existing taxes on
    wages, goods and services should be progressively replaced
    with a property tax on the annual rental value of all land.
    This is referred to as Land Value Taxation (LVT) and is
    defined and explained in the attached appendices 1 and 2.
    The Campaign would wish to see 100% of the land value
    collected in this way.

PART II
GENERAL BACKGROUND CONSIDERATIONS

1    The Land Value Taxation Campaign believes that confusions
    arise through imprecise definitions of "land", or rather,
    through indiscriminate use of otherwise precise definitions.
    Whereas at law, "land" means immovable property ("real
    property"), the Campaign uses the word in its meaning in
    political economy (the whole of the material universe
    outside of man and his products). A landowner in economics
    is not necessarily the superior. Anyone with a beneficial
    interest in land (a holding which could be let or sold at
    profit) is to that extent a landholder. Popular usage more
    nearly corresponds to the Campaign's: people do not normally
    think of houses, factories and farm buildings as "land".
    To add to the potential for confusion, book keepers drawing
    up balance sheets regard land as capital, which in political
    economy it definitely is not.

2    The Land Value Taxation Campaign considers that the
    Consultation Document emphasises land use at the expense of
    attention to the fiscal aspects of land tenure which underlie
    considerations of use, mis-use, under-use and non-use.

3    We note that the terms of reference of the Land Reform
    Policy Group restrict it to the consideration of rural land.
    We would urge that this be extended to embrace all land in
    Scotland. There are several reasons for this. At the margins,
    for example, on urban fringes, no clear distinction can be
    drawn. There are also significant pockets of industrial
    development in areas that are predominantly rural - for
    example, those associated with the oil industry and whisky
    production. In terms of its value and the number of people
    affected, urban land is of far greater importance. Many of
    the problems which affect rural areas - misuse and under-use
    of land, for example - are equally to be found in cities, and
    policies which would act effectively in rural areas would apply
    also in cities with proportionally greater effect.

4    Land Value Tax at a substantial proportion of the annual
    rental value would induce the landowner to make optimum use
    of the site, as it would be necessary to earn the income from
    which the tax would be paid. Land would not be held out of
    use or under-used.

5    A substantial proportion of non-urban Scotland consists of
    marginal and sub-marginal land. One of the effects of Land
    Value Tax is that productive activity on marginal land is not
    taxed, because the land value tax assessment of marginal land
    is, by definition, nil. In the absence of existing taxes,
    large tracts of sub-marginal land would undoubtedly become
    capable of supporting productive economic activity, and the
    Campaign would therefore advocate the progressive replacement
    of existing taxes by Land Value Tax. Within the Scottish
    context, this would enable the Parliament to reduce national
    taxes by the maximum currently permissible amount, ie the aim
    should be to set the Scottish income tax rate at 3p less than
    the national rate.

6    Land Value Tax is peculiarly suitable for revenue-raising in
    Scotland, especially in comparison with alternatives such as
    supplementary income taxes. Scotland is characterised by a
    relatively small population and an extensive land area. The
    value of urban land is comparable to that in similar areas
    elsewhere in Britain, but the sheer extent of depopulated
    rural land of low value results in relatively high land value
    per head, having the potential to provide a buoyant and robust
    tax base. This is an important advantage over income tax because
    average incomes in Scotland are lower than the average for the UK.

7    Although the Campaign was established to promote the case for
    a national land-value tax, we would point out that, as is the
    case with all forms of property tax, LVT is suitable for all
    tiers of government and could be readily adapted to any multi-
    tiered structure, for example that resulting from Scottish
    devolution.

8    Land Value Tax is morally justified, being in accordance with
    the "benefit principle"; land values are created and sustained
    by the presence and activities of the community today - any
    arrangement made in previous centuries is of little relevance
    since land value rests on the assumption that public services
    and a state of civil order will be maintained today and for
    the foreseeable future. An example of the operation of this
    principle is that the tax would provide a clawback mechanism
    whereby increases in land value due to infrastructure
    improvements, subsidy, etc, were returned to the Exchequer,
    thereby providing a rolling fund for further improvements if
    desired.

9    Retaining the principle of Crown as Paramount Superior creates
    an elegant constitutional situation if a system of Land Value
    Taxation is applied throughout Scotland, urban as well as rural,
    under a title such as "Crown Feu Duty". Until paid, this would be
    a first charge upon the land in priority over all other
    incumbrances whatsoever. Payment would be a condition of holding
    the land. The Crown in Parliament would be in possession of a
    source of revenue obtained without resort to taxation; with a
    feu duty close to 100% of the annual rental value of the land,
    it could well be that no other taxes would be required.

PART III
ANSWERS TO THE QUESTIONS IN CHAPTER 9

1    What specific examples are there of problems due to private
    ownership, and what would be suitable remedies?

    Land Value Taxation Campaign would argue that private ownership
    of land per se is not a problem; the problems arise due to the
    private appropriation of land rent.

    This has the following consequences.

    (a) Land is not necessarily kept at its optimum use consistent
    with the planning regulations

    (b) Land may be held out of use altogether, thereby depriving
    others of a productive opportunity.

    (c) Government is deprived of a potential source of revenue
    and therefore has to rely on other forms of taxation which are
    harmful to the economy. Much of non-urban Scotland consists of
    marginal and sub-marginal land. Where land is barely above the
    margin, taxation is likely to be critical to the viability of
    an economic enterprise - in other words, there will be situations
    where a business would be viable but for the imposition of the
    tax. Potentially viable land then becomes sub-marginal. In this
    regard, harmful taxes include not only income tax, and National
    Insurance, but also fuel tax and VAT, which increase the cost of
    business inputs and tip the balance into unprofitability. This is
    particularly so in the case of small businesses and in remote
    rural areas where transport costs are high.

    (d) Expenditure on infrastructure improvements, subsidies, etc
    are all ultimately capitalised into land values. As a consequence,
    a significant proportion of the income stream from new developments
    of this type is appropriated by landowners, and this makes
    infrastructure investment difficult to justify, since the investor
    sees much less than the full return and there is usually little
    direct return in the form of increased tax yields from landowners.

    Land Value Taxation (LVT) would help each of these

    (a) LVT at a substantial and rising proportion of the annual
    rental value would induce the landowner to make optimum use of
    the site in order to earn the income from which the tax would be
    paid. The cost of holding land out of use would be too great for
    landowners to indulge in this practice.

    (b) One of the effects of replacing existing taxes by LVT is to
    reduce or eliminate the burden of taxation on economic activity
    on marginal land, because the assessment of marginal land for LVT
    purposes is, by definition, nil.

    (c) In the absence of existing taxes, large tracts of sub-marginal
    land would undoubtedly become capable of supporting productive
    economic activity, and the Campaign would therefore advocate the
    progressive replacement of existing taxes by LVT.

    (d) LVT would provide a clawback mechanism whereby increases in
    land value due to infrastructure improvements, subsidy, etc, were
    returned to the Exchequer. This would provide a rolling fund for
    further improvements if desired.

2    Is there a strong enough case to justify pursuing a prohibition
    on corporate ownership?

    The Campaign does not see corporate ownership of land as a problem
    per se. If all land were to be rated on the assumption that it
    was in optimum use consistent with the planning regulations, the
    question need not arise.

3    Does it really matter whether the owner of land is foreign or a Scot?

    No. If land were to make a substantial contribution to public
    revenue on the assumption of best use, then neither the
    nationality nor the presence of the owner would matter from an
    economic point of view.

4    Does it really matter whether the owner is absent?

    No. What matters is that LVT is paid on the land holding.

5    Should public bodies reduce their holdings, and, if so, on what
    basis?

    Under an LVT system, public bodies would automatically come under
    financial pressure to hold no more land than was necessary for
    their activities.

6    Should the Scottish Executive press for change to the remit of
    the Crown Estate Commission to strike a better balance between
    income generation and development?

    The principle should be best usage of all plots. LVT would
    encourage this.

7    How can landowning non-Governmental organisations best contribute
    to rural development?

    The Land Value Taxation Campaign has no view on this issue.

8    Are new powers needed to tackle problems faced by those
    considering community ownership?

    The Land Value Taxation Campaign has no view on this issue.

9    How do current tax policies affect the price of land, and thus
    the objectives of achieving, sustainable development in rural areas?

    Tax concessions granted when land is used for certain approved
    purposes are, like subsidies, capitalised into land prices.
    Existing tenants will benefit only in the short term.

    The right to use and develop land in any lawful way includes the
    right to shoot over it and preserve game for that purpose. Such
    rights should be included in LVT valuations and ought not to have
    been exempted from non-domestic rates (the UBR). Furthermore,
    differential rates of tax on property (land and buildings) in
    different classes of use tend to encourage one use rather than
    another. For example, within a particular taxation area, premises
    in business use are subject to a higher rate under the UBR than
    they would be if in residential use and liable to the Council Tax.
    Observations suggest that this is leading to a loss of employment
    opportunities as business premises are converted into residential
    accommodation.

    The absence of a holding tax on land, based on current market
    rental value and kept up to date, (for example, LVT), means that
    land prices are not only the capitalisation of the annual rental
    value, but also include an element of hope value in the expectation
    of rises in the future, from infrastructural improvements, general
    economic growth, population movements, possible reallocation of the
    land to a higher use class, subsidies, tax concessions, interest
    rates and inflation. LVT would remove this speculative froth from
    land pricing.

    Land prices are also "sticky downwards" - they rise more easily
    than they fall in response to market pressures. At times when
    land prices are depressed, owners generally keep it off the
    market awaiting an upturn in the economy. Thus, land prices do
    not respond to supply and demand in the same way as manufactured
    goods. Because land fixed in quantity, is not transportable, and
    has no cost of production, increased demand does not call forth
    increased supply.

    Current taxes bear on wealth creation, on goods and services, on
    trade, on spending by consumers and on savings. Withholding and
    under-use of land incur no penalty other than rental income
    forgone. Would-be producers are forced to go to poorer, less
    productive sites, which in rural Scotland may well mean that
    the activity is not worthwhile.

    In summary, the present tax system distorts patterns of land use,
    takes from the wealth creators and is benevolent to indolent and
    uncaring landowners. This is harnessing the profit motive in
    reverse!

10    What are the barriers to acquiring small units of land in rural
    areas for housing and development?

    Owners tend to hold on to land unless there is a very good reason
    for selling. Land prices are higher than the current earning
    capacity of the land alone would justify. LVT would act as a
    fiscal disincentive to holding on to more land than necessary.

11    To what extent are existing compulsory purchase powers defective
    and in need of amendment or replacement?

    The Land Value Taxation Campaign has no view on this issue, except
    in so far as it considers that LVT, fully and properly implemented,
    would make such powers largely irrelevant.

12    Is there a case for saying that current arrangements do not allow
    time for the assessment of the public interest in major sales?
    How to define such major sales?

    The Land Value Taxation Campaign has no view on this issue.

13    To what extent is the 1991 Act inhibiting access for young
    would-be farmers; and could the existing system be adapted to
    create new types of tenancy and to encourage new agricultural
    tenancies?

    The Land Value Taxation Campaign has no view on this issue.
    We merely comment, en passant, that tenants with secure
    possession probably acquire a beneficial interest in land with
    the passage of time, until the superior is able to command a
    higher payment from the feuar.

14    Could there be changes to current arrangements for resolving
    disputes?

    The Land Value Taxation Campaign has no view on this issue.

15    Should there be changes to make it easier for tenants and crofters
    to plant and harvest trees?

    The Land Value Taxation Campaign has no view on this issue.

16    Should there be changes to encourage tenant farmers to involve
    themselves fully in conservation of the natural and cultural
    heritage?

    The Land Value Taxation Campaign has no view on this issue.
    LVT would, however, be of value in assisting conservation, both
    in urban and in rural areas. This may be seen by considering how
    LVT would operate. The designation of Sites of Special Scientific
    Interest (SSSIs) and Ancient Monuments, such as prehistoric burial
    sites, and the operation of Tree Preservation Orders, restrict
    what can be done with the land, and therefore tend to depress
    land values. A system of LVT would automatically compensate for
    the economic disadvantages of having to protect particular trees,
    or wildlife habitats, or sites of archaeological importance.

17    Should steps be taken to encourage tenant farmers to develop the
    sporting interest of their holdings as part of broader land use
    businesses?

    The Land Value Taxation Campaign has no view on this issue. For
    LVT purposes, the value of sporting rights is included in the
    land value assessment.

18    Should greater encouragement be given to small scale mineral
    developments of all kinds as part of rural enterprises?

    The Land Value Taxation Campaign has no view on this issue as
    such, except to note that consent for mineral development
    represents an intensification of use and hence land used for
    this purpose would be subject to a higher assessment for LVT
    purposes.

19    How best to ensure that all crofts are actively occupied?

    LVT at a substantial rate would ensure that all land was at its
    optimum permitted use. Of course, if the croft were on
    sub-marginal land, it would be unrealistic to expect it to be
    actively occupied. No LVT would be levied in such circumstances.

20    Should decrofting be discouraged and land kept in crofting tenure
    wherever possible?

    The Land Value Taxation Campaign has no view on this issue
    - however, by ensuring proper use of higher quality land, LVT
    would permit crofters to move to more productive plots.

21    Could the creation of new crofts or smallholdings be worth
    considering for specified areas if it would help stem or reverse
    population loss in remote rural areas through the encouragement
    of self-sustaining economic activity?

    We would point out again what was stated in response to
    question 1; at or close to the margin, taxation has a crucial
    effect on the viability of any economic activity.
        
    Self-sustaining economic activity dependent on public subsidy
    is a contradiction. If land is sub-marginal and generates no rent,
    it may be possible to argue for subsidy on the grounds of general
    and specific social policy. Once rent arises, however, LVT would
    recoup the marketable value of that land.

22    Should current right to buy legislation be amended and,
    if so, how?

    The Land Value Taxation Campaign has no view on this issue.

23    Would it make sense to look at ways to bring all other crofting
    communities into a single simplified procedure for acquiring
    community ownership?

    The Land Value Taxation Campaign has no view on this issue.

24    Is crofting administration part of the problem?

    The Land Value Taxation Campaign has no view on this issue.

25    Is part of the solution to focus and integrate existing grant
    and other schemes better to promote desirable land use?

    The Campaign has major reservations about grants and subsidies,
    since they are normally capitalised into higher land prices
    - also, the availability of such grants is reflected in rental
    levels and grants made to tenants are effectively a gift to the
    landowner.

26     How far can the Government continue to rely on a voluntary
    approach, supported by advice and information, as a way of
    achieving good management of land?

    The Land Value Taxation Campaign is not primarily concerned with
    land use and land management. Its objective is to restore to the
    community what the community as a whole creates and maintains,
    namely, land value. It is, however, the opinion of the Campaign
    that good land use and good management will inevitably follow
    from the need to generate a sustainable income stream from the
    occupation of land, so as to be able to pay the duty demanded now
    and in the future.

27    Could conditions on grants help?

    See response to 25 above

28    How best to discourage undesirable land use if the normal
    operation of market forces plus the present range of Government
    incentives and controls fail to deliver the desired outcome in
    terms of sustainable development?

    LVT at a substantial rate will ensure that land is kept in
    optimum use consistent with the planning regulations. If these
    are varied, land values will respond. Whether planning decisions
    are themselves good or not falls outside the self-imposed remit
    of the Land Value Taxation Campaign.

29    To what extent do the existing exemptions of agricultural and
    forestry related developments from planning control cause
    problems, and could changes to the land use planning system help?

    See response to 28 above.

30    Could new financial penalties for undesirable land use be justified?

    LVT at a substantial rate will ensure that land is kept in optimum
    use consistent with the planning regulations. Beyond that, it may
    be that fines are necessary, for example, to deter pollution.

31    Might there need to be a new power of compulsory purchase in the
    event of undesirable land use which cannot be tackled otherwise?

    The Land Value Taxation Campaign has no specific view on this
    issue, but see response to question 11 above.

32    Could a strengthening of public rights over the foreshore be
    justified?

    Private owners having rights over the foreshore should, like
    all other landowners, pay their LVT.

33    Could the creation of significant new public rights in the name
    of the Crown be Justified and, if so, what would be achieved, and
    how would such a system be implemented?

    Retaining the Crown as Paramount Superior is an acceptable and
    desirable basis for land holding within an LVT system.
    Legislation on this point should include in its preamble a
    statement to the effect that the Crown holds the land on behalf
    of the entire nation. Subordinate holdings should be replaced by
    a system of Crown Feus - a national feu duty, or national land
    rent or national land value tax. This arrangement would, we
    believe, represent an ideal adaptation of ancient practice to
    modern conditions.

34    Is it worth £25m to speed up transfer of data to the new Register
    by the year 2000?

    Not per se. The Land Value Taxation Campaign considers 2003
    acceptable. Costs incurred to introduce a LVT system would be
    voted by Parliament. For our purposes, we have no use for a
    valuation of developments in and on the land, but only of the
    land itself. For LVT, only the location values of sites are
    required.

35    Is it worth £300m for a Register listing all land; or between
    £5-15m for a Register listing all holdings over 1,000 acres?

    The figure of £300 million seems high, representing almost
    £400 per title. The Campaign is against any exemptions where
    registration of land for LVT is concerned. Presumably, the
    figure of 800,000 titles outstanding includes some very
    valuable urban plots of under an acre. A cut-off of 1000 acres
    would be absurd in such circumstances.

    If, therefore, there is to be any cut-off, we would suggest that
    it is based on land value, not site area, as urban sites of a
    fraction of an acre are worth more than rural sites of several
    thousand acres. In any case, no clear distinction can ultimately
    be drawn between urban and rural land; most cities include
    extensive areas of "urban fringe" and there are important pockets
    of land of relatively high value in industrial use in rural areas.

    We reiterate opposition to exemptions. If, however, administrative
    needs are initially pressing, the Campaign suggests that any
    exemptions considered necessary be extended to sites with an
    annual land rental value of less than, say, £100. Small adjacent
    plots in single use or evident complementary use would be treated
    as one, to prevent spurious sub-division to escape LVT liability.

36    Could introducing a duty to disclose information on beneficial
    owners be justified, and how might enforcement be achieved?

    The land register, including the land value tax assessments,
    should be available to public inspection. This is essential for
    the proper operation of the LVT system, to ensure that valuations
    can be challenged and an effective system of appeals can operate.
    The superior under the Crown would be responsible for paying the
    LVT (national feu duty), but the Land Value Taxation Campaign has
    proposals for apportionment provisions in the legislation to cover
    the phasing-in period.

37    How much would publication of data on recipients of agricultural
    grants and subsidies (to the extent permitted under EU legislation)
    help?

    The Land Value Taxation Campaign has no view on this issue.

PART IV

FURTHER COMMENTS ON SPECIFIC POINTS RAISED IN THE REPORT

#2.4

    Introduction of Land Value Taxation is the most important single
    change required to remove barriers and promote sustainable
    development. We do not claim that LVT alone will solve all the
    problems indicated, but predict that in the absence of LVT, many
    existing problems will undoubtedly continue and that new problems
    will emerge.
 
#3.8

    For our view on LVT in relation to the foreshore and to the
    territorial sea bed, please see our response to question 32
    (part III above). The criticism that Crown Estates Commission
    rents represent resources withdrawn from the area concerned, is
    a profound misunderstanding if translated into what the future
    introduction of LVT in Scotland would mean. All the value of all
    land in Scotland is collected as annual rent (feu duty) for the
    Crown (Paramount Superior) on behalf of all Scots. Existing taxes
    are removed or abated. Scots share equally in the value of their
    land. The remote islander gives up the mite his land is worth, to
    share in the riches of Central Edinburgh.

#3.12

    The taxation of "profit" distorts the price of land. This results
    in an artificial shortage of land relative to demand, and land
    price is increased on that account. More intensively capitalised
    production is encouraged, which tends to the disadvantage of labour
    overall.

    Public subsidies, tax exemption (eg de-rating) and higher product
    prices guaranteed by intervention, all are all eventually reflected
    in land rents and land prices.

#6.3

    A costly inspectorate is not required. LVT promotes optimum use of
    land and acts to this end without further intervention.

#7.2

    This analysis of feudalism is highly relevant to our case. The
    theory that "all land was ultimately owned by the sovereign" is
    based on the doctrine that land, because it was not created by any
    man, is not morally the property of any human being but is vested
    in the Sovereign as representative of God and of the community at
    large.

    Another way of looking at the matter is to consider that the
    Sovereign had special duties towards his subjects, such as the
    preservation of civil order, defence from foreign enemies, etc,
    which could only be discharged if he received services or their
    equivalent from his subjects, and that this revenue should be
    related to the benefit they received in the way of specially
    prescribed rights over particular parcels of land.

    The analysis notes the development of subinfeudation, on which
    existing feu duties are based. This practice seems to derive from
    the responsibility of tenants in capite to perform duties towards
    their feudal inferiors corresponding to those which the Sovereign
    performed towards them, notably, protection against outside enemies.

    In the Highlands, the traditional function of a clan chief was
    comparable to that of tenants in capite, but was, if anything,
    related to a sense of quasi-parental responsibility towards his
    clansmen. There is a remarkable exchange of documents between the
    Prime Minister, W E Gladstone and Sir William Harcourt in January
    1885 (CAB 37/14/7, Public Record Office), which describes the way
    in which Highland proprietors discovered and exploited their legal
    rights as landowners and forsook their traditional responsibilities,
    with disastrous consequences for their clansmen, and ultimately for
    themselves also.

#7.3

    Retaining the Crown as Paramount Superior is a desirable basis
    for land holding, in that it implies that the Crown "owns" the
    land on behalf of the entire nation. Holdings, as such, continue;
    they are no longer, in effect, what in England are known as title
    absolute (formerly fee simple). The feu, now national, simply
    becomes an obligation to pay the Land Value Tax. This arrangement
    would, we believe, represent an ideal adaptation of ancient practice
    to modern conditions.

PART V

APPENDICES

APPENDIX 1 - DEFINITION OF LAND VALUE TAXATION

A1.1    LVT is a tax on the annual rental value of land. The valuation
    is the current annual market rental value of the land alone,
    disregarding buildings and other improvements.

A1.2    Each unit of land is assessed at its unimproved site value, with
    all surrounding land taken as being in its existing condition.

A1.3    All land, including vacant and agricultural land is subject to
    the tax, and the valuation is on the basis of optimum use within
    whatever permissions and constraints apply.

A1.4    In practice, LVT would operate in much the same way as the present
    national non-domestic rate, with the difference that no land would
    be exempt and buildings and other improvements would in effect be
    de-rated.

APPENDIX 2 - DEFINITION OF LAND VALUE

DEFINITION A
    The following definition of land value is that given in
    Section 3 of London Rating (Site Values) Bill, 1939.1

    The annual site value of a land unit shall be the annual rent
    which the land comprising the land unit might be expected to
    realise if demised with vacant possession at the valuation date
    in the open market by a willing lessor upon a perpetually
    renewable tenure upon the assumptions that at that date -

    (a)    there were not upon or in that land unit -

        (i) any buildings erections or works except roads; and

        (ii) anything growing except grass heather gorse sedge or
        other natural growth;

    (b)     the annual rent had been computed without taking into
        account the value of any tillages or manures or any
        improvements for which any sum would by law or custom
        be payable to an outgoing tenant of a holding;

    (c)    the land unit were free from any incumbrances except
        such of the following incumbrances as would be binding
        upon a purchaser -

        easements; rights of common; customary rights; public
        rights; liability to repair highways by reason of tenure;
        liability to repair the chancel of any church; liability
        in respect of the repair or maintenance of embankments or
        sea or river walls; liability to pay any drainage rate under
        any statute; restrictions upon user which have become
        operative imposed by or in pursuance of any Act or by any
        agreement not being a lease.

        "works" does not include any works of excavation or filling
        done for the purpose of bringing the configuration of the
        soil to its actual configuration;

        "road" does not include any road which the occupier alone of
        the land concerned is entitled to use.


DEFINITION B

    The following definition of annual rental value is taken from
    "Nature's Budget" by James Dundas White (Allen and Unwin, 1936,
    page 86). White was a barrister, and a MP for twelve years.

    The "annual rental value" of any portion of land in Scotland
    might be defined as the best annual feu duty that could reasonably
    be obtained for that land if it were feued with vacant possession
    by a willing superior at the time of valuation, assuming that any
    buildings or other improvements on it were non-existent or
    exhausted, that it is free from all incumbrances except those
    mentioned later2, that the feuar would have unrestricted right
    to use and develop it in any lawful way, and that the National
    Land-Rent3 for it would be payable by the superior and not by the
    feuar.

1The full text of the Bill is on this web-site - see index page
- or copies are obtainable on request from the Campaign, which distributes
it following consultation with Messrs. Dyson, Bell & Co., and Mr J. Hastings,
Clerk of the Journals, House of Commons, confirming that there was no
objection to distribution.

2The list is not dissimilar to that shown at (c) under A above, but White
noted that liabilities of an occasional character whose amounts cannot
be ascertained beforehand, were extinguished in Scotland by compulsory
redemption under the Feudal Casualties (Scotland) Act, 1914.

3White chose National Land-Rent as his term for the Land Value Tax. The
Land Value Taxation Campaign suggests Crown Feus as another option.

 

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