“Nothing is yours. It is to use. It is to share. If you will not share it, you cannot use it.” – Ursula K. Le Guin
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The UK as a whole but Scotland in particular appears to be creeping ever closer to the inevitable realisation that a few people hoarding stores of wealth is inherently bad for society and that wealth should be taxed.
The debate at the moment is largely focused on how to do it. The simplest version is probably also the worst. That would be to have everyone whose net worth is above a certain threshold tally up the value of all of their possessions (from housing to company ownership to cars to artworks) and then pay a tax based on a percentage of that value.
It’s often hard enough to do this for someone’s estate when they die – it’s even harder when they are still alive enough to move their mobile assets around to hide them from the Revenuers or to move themselves to somewhere that’s quite happy to host the ultra rich trying to avoid their responsibilities. Richard Murphy makes this point though he also offers suggestions that would work at a UK level such as reforming capital gains tax and corporation tax and removing tax subsidies from high value pensions. His 2024 Taxing Wealth Report can be read here.
In Scotland in particular though, there is a very large store of wealth currently being relatively untaxed that could be directly addressed without fear of the billionaires fleeing – our land and the ownership of it.
No matter where someone resides in the world, they can’t take their owned land in Scotland with them and therefore the land itself can be taxed regardless of who owns it and where.
“Who Owns Scotland?” is a key question, however, and one that is strangely unanswered for a country like ours. Andy Wightman is the go-to source for detailed information of land ownership, especially where that ownership is obfuscated through corporate or financial structures, but even his database currently covers less than 80% of rural land. The Scottish Land Register is, after many years of missed deadlines, still incomplete.
We also know that the land reform legislation passed in the previous Parliament is unlikely to enact meaningful reform of ownership. It may well have positive impacts in the management of land but the regulations only cover the largest estates and there are ways to avoid its strictures (such as by breaking a single estate up and setting up trusts or companies to own each chunk separately, even if a single individual owns all of those companies thus still controls all of the land). Even the rules around forcing some sales to offer lots to communities are unlikely to be meaningful if the communities don’t have the resources to buy the lots.
This is where tax may have to play a role.
One of the barriers currently facing bringing in a land tax is the lack of data not just on ownership but on valuation. The latter isn’t insurmountable and there are ways to do it. The Scottish Land Commission is investigating various approaches to valuation, and these basically boil down to a few key approaches.
The first is an algorithmic approach similar to the way Zoopla values your house and is based on similar nearby sales. This is more complicated for land than housing because land sells less often and has more variation even field-to-field but it can give a rough idea (my own paper on taxing land took a not-dissimilar proxy approach by combining national sales data with agricultural soil grade information).
Another is obviously to update valuations when land is sold or transferred but could also include valuation data captured during events like the owner taking out a loan secured on the land, reinsuring it against damage or when applying for planning permission to build on it. There may also be bespoke site surveys which could happen either as the result of any of the above, randomly to help benchmark the algorithmic approach or if the landowner is unhappy with their algorithmic valuation and wants a manual correction (this last one could be subject to a fee and on the understanding that valuations could go up as well as down – this would deter people disputing their valuation without good reason).
“The good news for land reform campaigners is that there seems to be a lot of things about to happen quite quickly in Scotland.”
Another slightly more radical version – but one not without precedent – is to allow owners to self-value their land but to give local government or communities the right to enact a compulsory purchase at the taxable rate regardless of any potential market rate. If you state that your Highland estate is worth £1 for the purposes of tax, then the local community can purchase your estate for £1. This would naturally incentivise owners to value their land accurately (or, at least, higher than the price the community is able to pay – the land speculation bubble has already priced many of them off the land).
Bringing in a land tax will therefore help to value land. It’s less of a barrier before a tax can be brought in but more like a problem of the land being difficult to value because there’s no tax to compel it to be valued.
I’m increasingly coming to believe that the same might be true for the problem of ownership too. That the barrier isn’t that we can’t introduce a land tax because we don’t know who we’re taxing but instead we’ll very quickly be able to find out who we’re taxing once we start introducing a land tax.
What would happen here is that the owners of land would be responsible for paying their land tax at the end of the year and would connect their payment to their entry or entries on the Land Register. These records could be checked for land that is on the register but which doesn’t have a tax payment linked to it. If tax is not paid on a portion of land and the owner is known, notices to owners could be sent out (along with late fees etc).
If ownership is not known or if the land is not on the register at all, then a public notice could be made calling for the owner to come forward with proof of ownership and an application to register their land. If none present themselves within a reasonable time (say, three or five years) then procedures dealing with ownerless land can be initiated with the land itself being ultimately transferred to a public body (the traditional recipient in Scotland would be the Crown, but I would argue in this post-feudal age that ownerless land should be converted into Common Good ownership).
This is a win-win for Scotland. Either land that is not declared on the Land Register gets registered quick to avoid being chased for tax evasion, or it comes back into public ownership and from there can be better used by an identifiable owner.
The good news for land reform campaigners is that there seems to be a lot of things about to happen quite quickly in Scotland. There was a fear for a while that the passing of the Land Reform Act last year would take the wind of out the sails of reform while doing little in itself to create much change but while the latter may yet be true, the former does not.
I can’t say too much at this stage other than to suggest that eyes are turned to the party conferences this year as there may be some interesting things happening. The Revive Coalition, of which Common Weal is a member, will be at both the SNP and Green conferences this month talking about land reform and where policies like a land tax can help to push things forward.
The important thing to remember in this campaign and in all others is to look at challenges not as barriers to prevent change but merely as obstacles to overcome or bypass. If we think we can’t do something, just check to make sure that we’re actually right about that and if we can’t do it in the way we want to, maybe we can do it another way instead. Being focussed on the solutions rather than being stopped by the problems is what will create change.
Taxing wealth is important and popular. Taxing land is one way to do that in Scotland. How to get there, is up to us.
