Monday 9 August 2004

Second homes and the council tax

Last Friday Bill Jamieson wrote an interesting article about the ending of the council tax discount for second home owners:
AS A soon-to-be second home owner I face hundreds of pounds of extra council tax and am wondering: what on earth is it I have done wrong? Like thousands of fellow Scots I am planning to retire out of the central belt. I bought what was a waterlogged and uninhabitable Inverogle Cottage by Lochearnhead. No-one else rushed to buy it and I know why. It has taken more than two years of planning procedures, environmental audits, building warrants and drainage work to get the basic site in order.
Of course, what Bill has done wrong is to be a self-reliant citizen. He has failed to put his future in the hands of his local councillor. How politically incorrect.

There are three letters on this subject in today's Scotsman. How about the one from Councillor Berry of North Berwick?

Bill Jamieson should count himself lucky that he has £100,000 in discretionary income. And if he wants a say in what Perth & Kinross Council do with his full whack of council tax, he should make a commitment to his supposed retirement community and move to Lochearnhead, rather than being just another absentee landlord, of which rural Scotland has always had a surfeit.
I rather expect that Mr Jamieson hasn't got "£100,000 in discretionary income". He's more likely to have incurred a sizable mortgage - just like most of Mr Berry's own electorate. And where on earth does Mr Jamieson describe himself as an "absentee landlord"? His article says that he has renovated his cottage with a view to retiring there.

For anyone still wondering why Scotland's economic growth is so dire, consider the words and tone of Councillor Berry's letter.

3 comments:

David Farrer said...

Comments made on previous template:

Neil
The point is that if there is no land value taxation/rates on unbuilt land then there is no tangible cost to the owner in deciding to keep it till the valuation reaches the desired amount 7 the owner might as well keep speculating.  
 
(I know that theoretically there is the opportunity cost lost of not immediately selling the land & investing it in the stock market but in practice human beings don't work that way)

14 August 2004, 00:00:46 GMT+01:00
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Stuart Dickson
Dave Hondahag 
 
Sorry to be pedantic, but you missed out the final full-stop.

12 August 2004, 22:19:58 GMT+01:00
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dave fordwych
Neil 
 
Run that one past me again please. 
 
What point does Stuart have about landholders not having an incentive to sell? 
 
With the difference in values currently between farm land and building land can you clue me up on what that incentive might be

12 August 2004, 08:23:18 GMT+01:00
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Neil
Stuart has a point about landholders not having an incentive to sell. Land Value Tax would make the use of land in uneconomic ways much more difficult. In practice taxing land within say 1/4 mile of a built up area would prevent hoarding withou bankrupting the entire farming community (theoretically not a bad idea but in practice rather cruel). 
 
The point about water facilities could perhaps be solved by allowing developers (or English water companies acting as subcontractors) to build them & connect them to Scottish Water & that Scottish Water should be legally required to provide the water at wholesale rates. Thus if somebody wants water in uneconomic places their house price goes up & if it is just because Scottish Water can't be arsed they lose out.

11 August 2004, 23:23:32 GMT+01:00
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dave fordwych
Stuart 
 
Where I live- a typical village in rural,Highland Scotland,grazing land is worth from £500/£1200 per acre,depending on quality. 
 
Literally over the fence,building land,i.e.- that small amount of land which the planners have designated as allowed to be built on but essentially the same land which is worth £500/1200 for farming- is currently selling for around £40,000 per plot, which is around 1/8 of an acre, giving it a value of £320,000 per acre. 
 
There may be in some areas landholdings which are "simply the toys of the rich" but there are none here that I know of.Almost all the landowners here are small farmers who would give their eye teeth to be able to sell plots on which houses could be built.They are matched by many people ,both locals and potential incomers, who would love to buy a plot and build but cannot afford to build a house which has cost £40,000 before a sod has been cut. 
 
I repeat: the problem is almost entirely due to over restrictive planning policies.

11 August 2004, 13:59:51 GMT+01:00
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David Farrer said...

Stuart Dickson
Dave 
 
I am not completely ignorant of the housing crisis in the Highlands, having lived there for several years, and stood for election to the Council on four occasions. 
 
Are you saying that the inadequate water/sewerage system is not a serious restriction on housing development? Are you saying that the Common Agricultural Policy does not artificially inflate the value of grazing land, thereby hindering sales to developers? Are you saying that suitable building sites are abundant in the West Highlands? 
 
If so, then it is you who needs to do a little research.

11 August 2004, 13:00:24 GMT+01:00
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dave fordwych
Andrew Duffin is right. 
 
The lack of housing in rural Scotland is almost entirely due to over restrictive planning policies. 
 
With respect Stuart, you don't know what you are talking about.

11 August 2004, 11:42:06 GMT+01:00
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Stuart Dickson
For all its rainfall, a significant problem with Highland housing development is the chronic lack of good mains water supplies, and even more so, mains sewerage. Many villages cannot expand much until a larger reservoir is built, often at great distance, and hence expensive pipeline and processing investment. 
 
Often this is just not worth it if you are trying to build just twenty homes, which would more than double many west coast villages. 
 
I agree that restrictive planning is a big problem, but the market is affected by all kinds of other supply, geographical and macro-economical factors. 
 
Learn your Scottish history. All good highlanders despise the sheep. Or rather, since I like fluffy animals, despise the people who prefer the sheep to the Gael. The pathetically artificial, subsidised sheep-economy of upland areas is still to be despised. I would buy lowland lamb: far better quality anyway.

11 August 2004, 07:16:36 GMT+01:00
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Andrew Duffin
Stuart, you have a point that many landholdings (I would suggest "some", but never mind) are playthings and therefore not amenable to the temptation of making a profit from building; however given the vast areas we're discussing I do not believe this is a significant factor. (Of course, if you have hard figures...) 
 
I think it's the planning system, and only the planning system, which prevents enough houses being built; restricted supply of course leading to higher prices - too high for the indigenous population, leading to the evils we all deplore. 
 
I've said it before and I'll say it again - reform, or preferably abolish, the planning system; the houses will be built, and the prices will fall. 
 
Incidentally what has not purchasing lamb got to do with this debate?

10 August 2004, 12:14:24 GMT+01:00
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Stuart Dickson
In many parts of the Highlands a fair share of the blame lies with landowners. Many refuse to release the limited supply of good building land, and they aren't persuaded by cash because many landholdings are simply the toys of the rich. Although the Highlands may appear extensive, if you study a map closely you will soon realise that good land, suitable for extensive housing, is mainly limited to narrow strips along the coast and lochs. 
 
I suspect that a good engine for Highland development will be when/if the WTO agriculture developments get through US fast-track legislation. When the Common Agricultural Policy starts to melt away then the value of grazings will diminish and some land for housing will come on the market. Not all landowners are wealthy: some depend on Brussels subsidies. 
 
I make my own contribution to Highland regeneration: I don't buy lamb (very often)!

10 August 2004, 06:55:16 GMT+01:00
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David Farrer said...






Neil
There is certainly a problem with wealthy 2nd home purchasers buying into a limited housing stock & thus forcing first time buyers to move out of the Highlands. 
 
The specific problem is that the housing stock is being deliberately limited by the refusal of bloodsucking luddite parasitic councillors to allow the building of new homes. 
 
The Scottish Highlands are a manmade desert from which human habitation has been driven out. 
Have a look at Earthlights < http://www.cojoweb.com/earthlights.html > for an inspiring (to non-Greens) view of mankind's role on this planet. You will see that mankind's role in the Highlands is unequalled in it's absence until you cross the Atlas mountains (South) or reach Arctic Russia (Eastwards) yet we are told that there is nowhere to build houses for locals or incomers. Told this by the same councilors who deny such permission. 
 
There is no way that any honest councilor, MSP or official can ever suggest that the housing problem there is the fault of 2nd home owners. In fact the influx of holiday home owners (& their money) would revitalise the place if they were only allowed to.

10 August 2004, 00:32:52 GMT+01:00
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Stuart Dickson
Agree that sales tax better. But that should be at the discretion of local authorities. No need for central govt to interfere.

9 August 2004, 12:51:43 GMT+01:00
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David Farrer
But would Mr Jamieson be taxed twice on his income that is no doubt earned solely in Edinburgh? The sales tax sounds fairer.

9 August 2004, 12:19:38 GMT+01:00
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Stuart Dickson
Introduce local income and sales taxes, and cut central government grants. Far fairer.

9 August 2004, 12:09:39 GMT+01:00