I am going to start with my beliefs and assumptions and you can refer to this blog when you puzzle about why I am saying something.
Fundamentally the earth belongs to all of us so we all have a right to the commons. What is the commons? What was here when we were born, or what the community or the country created while we were alive. Sounds esoteric? Well let’s think about that one. The land was here always, it continues when we die. So was the sea and the waterways, give or take a few rivers that divert. The minerals under the ground, the fish in the sea and the native forests as well as the air, the electromagnetic spectrum were all there. God’s creation so to speak.
Now I will jump to some common sentences and phrases – “We should tax wealth not income”, “We need to use resource taxes like carbon taxes and pollution taxes for public revenue” and finally and best, “Tax land not labour”.
Books have been written on the topic of land, including by Henry George, a San Francisco journalist who pondered on the topic of poverty and published his best seller in 1969 and the Green Parties of the world have proposed resource taxes and pollution tax, the latter being the tax for the right to use the rivers or sea or soil to dump your waste.
Various Governments have imposed resource taxes and called them different things. The most common of these is the tax on mineral exploitation, in particular oil and we call these royalties. The word “royalty” comes from the Middle Ages, when kings (royals) had rights because they owned land on which there were minerals. The person who wanted the minerals would pay for the right to take these minerals out of the land.
So royalties are payments of various types to owners of property for use of that property. And the owners are broadly “the people, “the community” or “everyone”. When the king owned the land people paid land rent, when lords and earls owned land people paid land rent sometimes in the form of produce.
Royalties also deal with payments for the right to use intellectual property, like copyrights, patents, and trademarks.
Licences are the right to use something that is owned by someone else, while royalties are the payments for that use. We pay for our drivers licence and in return have the right to drive a car on the road which is public property.
Royalties protect the owner of intellectual property (like copyrights, patents, and trademarks) and other types of property.
Enough of that!
Now let’s look particularly at land because that is the issue with any housing, including retirement villages.
What makes the value of land rise?
1. Natural features. Land near a river or with a sea view has a higher value than surrounding land.
2. Central government infrastructure like schools, hospitals, railways, roads
3. Local government infrastructure like street lighting, sewerage, water, storm water, community centres, roads
4. Commercial activity – shops, offices, services