They own land, give them their money back!

Occasionally, you have to have some sympathy with the land speculators.

From The Telegraph:

Oil-rich emirate Qatar has put its vast £3bn Chelsea Barracks property project under review on fears over Britain’s flatlining economy, it was suggested on Monday night.

The proposed development, the Qataris biggest single investment in London, was due to include 450 luxury houses and 123 affordable homes. But the emirate’s property arm, Qatari Diar, is now said to be having second thoughts over the ambitious project, with the latest quarterly figures putting Britain on track for a triple-dip recession...

There are now also thought to be concerns that Qatar overpaid for the Barracks site when it bought it from the Ministry of Defence for £959m in 2007, and could compound that by spending another £2bn on its development. Plans for the weed-strewn site include seven-bedroom mansions as well as one-bedroom flats.

The numbers are insane; £959 million ÷ 573 flats = £1.7 million per flat, just for the land. And £959 million ÷ 12.8 acres = £15,500 per square yard. That's like covering the whole area with £1 coins stacked ten high.

Be that as it may, nothing is happening, it was a nice money raiser for HM Government, but the Qataris are losing money on the deal and no housing is being built, our builders aren't earning any money etc. Not a good outcome.

The extreme response would be to do like Hong Kong and tell the Qataris that the freehold has been converted to a thirty-year lease, so they'd better get on with it.

The fairer, and indeed fairest, thing to do would be to retrospectively apply LVT to that site, with an LVT bill of £29 million a year (£959 million x 3%).

So the Qataris get a refund* of £814 million (the £959 million they paid up front minus five years' worth of LVT for the period they've owned it), and the site will be costing them £29 million's worth of LVT for every year that they continue to own it, i.e. to demand government-protected exclusive possession.

The Qataris will be able to use the £814 million refund* to pay half the construction costs, and then when they sell they'll each be liable to £50,000 a year in LVT (573 x £50,000 = £29 million).

* Obviously, the UK government would be advised to stick that £814 million in an escrow account, which is earmarked for paying the LVT and the construction people.

Sorted.