Capturing development value, principles and practice: why is it so difficult?

Tony Crook and Christine M E Whitehead

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Land prices have risen significantly in England over the last two decades, generating debate about how far ‘unearned increments’, particularly those arising with planning permission, can and should be taxed for the public good. In principle, taxing such increases should be easy, although experience suggests otherwise. Taxing them, like any other tax, should be judged by how much is raised together with three welfare criteria: do they promote a more efficient use of resources; achieve more equitable outcomes; and comply with taxation principles of revenue raising, fairness and administrative competence. The paper discusses the two main UK mechanisms: unhypothecated national taxation and negotiated local contributions for infrastructure and affordable housing, assessing how far they have met these requirements. Finally, the paper considers how the current system might be modified better to achieve the desired outcomes and whether there is a case for more fundamental reform.

Keywords: land value capture; planning obligations; S106; community infrastructure levy (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2019-06-01
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in Town Planning Review, 1, June, 2019, 90(4), pp. 359–381. ISSN: 0041-0020

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:101263

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