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UK—A Century of Failing (and Sometimes Succeeding) at Value Capture

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  • Richard Grover

    (Independent Researcher, Winchester SO22 4QJ, UK)

Abstract

The United Kingdom has had a series of unsuccessful attempts at securing land value capture in 1909, 1947, 1967, and 1975. The 1909 land duties would have taxed increases in land values irrespective of the source. The latter three combined public bodies, acquiring development land with levies on developers. For them, value uplift was limited to that arising from the granting of planning consent. None of the measures were fully implemented and were reversed by incoming governments. One of the key problems with value capture policies has been the lack of political consensus. Since 1979, consensus has developed around the use of three types of value capture instruments. Development corporations have been created for the regeneration of local areas by acquiring development land and improving it. Local authorities have been able to use planning obligations and community infrastructure levies to oblige developers to mitigate externalities. Governments have made it clear that these are not to be used as value capture devices and therefore are really applications of the polluter pays principle. Thirdly, there are national taxes that fall on increases in the value of land, namely, business rates, stamp duty land tax, capital gains tax, and inheritance tax.

Suggested Citation

  • Richard Grover, 2025. "UK—A Century of Failing (and Sometimes Succeeding) at Value Capture," Land, MDPI, vol. 14(5), pages 1-22, April.
  • Handle: RePEc:gam:jlands:v:14:y:2025:i:5:p:936-:d:1642433
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    References listed on IDEAS

    as
    1. Hengstermann, Andreas & McElduff, Linda & Ritchie, Heather, 2025. "Capturing or compensating? Comparing legitimacies, legitimations and rationales of added value capture instruments," Land Use Policy, Elsevier, vol. 150(C).
    2. Alan W. Evans, 1973. "The Economics of Residential Location," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-01889-5.
    3. Hiroaki Suzuki & Jin Murakami & Yu-Hung Hong & Beth Tamayose, 2015. "Financing Transit-Oriented Development with Land Values : Adapting Land Value Capture in Developing Countries," World Bank Publications - Books, The World Bank Group, number 21286, August.
    4. Richard Grover, 2018. "Betterment: a taxing problem," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 36(2), pages 217-226, March.
    5. Rufus S. Tucker, 1915. "The British Taxes on Land Values in Practice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 29(4), pages 794-819.
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