As politicians paint a picture of doom and gloom in the public finances, the money required to restore our public services floats all around us. As Kevin McVey argues, SFI’s proposal for a 1% land and property tax could end austerity immediately and bring in millions for the Scottish Government.
There is a daily litany of doom from our politicians telling us that there is no money for our public services. From bins to building works, the same old tune is played that there is no ‘magic money tree’ that can provide the cash needed to maintain our already depleted community services. Ironically it is a tune that only changes when its money for bombs and bullets. Money for bombs and nothing for the bairns is their mantra.
At the same time, we have just suffered substantial rises in Council Tax across local authorities in Scotland. The tax is doubly regressive, not only because it disproportionally falls on the shoulders of those on lower incomes increased at a time of a cost-of-living crisis, but also because it does not raise enough to protect and improve services. Clearly something is badly amiss and a whole new approach is required to the funding of the public services we all rely on.
Simply put, the problem is the reluctance to tax the rich. An unwillingness to target the huge assets accrued by the wealthiest in a society that is now becoming so unequal that even some millionaires are making the call for them to be taxed more! A wealth tax is needed, and Socialists for Independence is actively looking at ways that this can be done in Scotland.
One way this could be done is by introducing a 1% tax on all land, buildings, and housing in Scotland. How much that would raise would depend on the total value of taxable property. We can, however, estimate that by basing it on recent property valuations. For example, the total value of residential property in Scotland was estimated at £636 billon in 2022, according to Registers of Scotland. Whilst the value of commercial property is harder to pinpoint exactly, estimates suggest it could be in the region of £100 – £150 billion.
For example, the total value of residential property in Scotland was estimated at £636 billon in 2022, according to Registers of Scotland. Whilst the value of commercial property is harder to pinpoint exactly, estimates suggest it could be in the region of £100 – £150 billion.
Excluding buildings, land values vary widely but estimates put it in the hundreds of billions, including agricultural, industrial, and undeveloped land. Accordingly, a rough total for all land, buildings and housing could be in the range of £800 billion to £1 trillion.
Using these figures a 1% tax yield, if the value was £800 billion, would be £8 billion a year, going up to £10 billion if the figure is £1 trillion. To put that into context, the overall Scottish budget is £60 billion, meaning that this 1% tax could fund around 13-16% of Scotland’s total public spending. This is no small amount in this age of austerity, and a figure that could be bigger if the very richest were to pay 2%.
Clearly much more work needs to be done to fully cost this proposal and accurately calculate the value of land and property, particularly given the obfuscation of Scotland’s biggest landowners who hide behind Scotland’s sometimes feudal land ownership laws. Similarly, there would have to be consideration around issues of tax exemptions and reliefs, and the potential impact on homeowners and tenants.
However, these issues could be ironed out in the process of preparing a Bill to be introduced to the Scottish Parliament. Make no bones about it, Scotland’s millionaire landowners and oligarchs will claim they would move to avoid such a tax. But their assets cannot be taken with them. The tax would encourage speculators and hoarders of land to sell up, encouraging others to use our land in more economically productive ways.Â
Surely enough is enough. In a Scotland of obscene inequality, it is time that the rich are made to pay their share and the social fabric of our communities are protected through the provision of decent public services accessible to all. A wealth tax is long overdue, and our proposal could be the way we bring it about.
Kevin McVey
Kevin McVey has spent a lifetime of activity in the socialist movement and is a founding member of Socialists for Independence.