More or less can be got for it, according as
the competitors happen to be richer or poorer,
or can afford to gratify their fancy for a particular
spot of ground at a greater or smaller
expense. In every country, the greatest
number of rich competitors is in the capital,
and it is there accordingly that the highest
ground-rents are always to be found. As the
wealth of those competitors would in no respect
be increased by a tax upon ground-rents,
they would not probably be disposed to pay
more for the use of the ground. Whether the
tax was to be advanced by the inhabitant or
by the owner of the ground, would be of little
importance. The more the inhabitant was
obliged to pay for the tax, the less he would
incline to pay for the ground; so that the final
payment of the tax would fall altogether upon
the owner of the ground-rent. The ground-rents
of uninhabited houses ought to pay no tax.
Both ground-rents, and the ordinary rent of
land, are a species of revenue which the owner,
in many cases, enjoys without any care or attention
of his own. Though a part of this
revenue should be taken from him in order to
defray the expenses of the state, no discouragement
will thereby be given to any sort of
industry. The annual produce of the land and
labour of the society, the real wealth and revenue
of the great body of the people, might
be the same after such a tax as before.
Ground-rents, and the ordinary rent of land,
are therefore, perhaps, the species of revenue
which can best bear to have a peculiar tax imposed
upon them.
Ground-rents seem, in this respect, a more
proper subject of peculiar taxation, than even
the ordinary rent of land. The ordinary rent
of land is, in many cases, owing partly, at
least, to the attention and good management of
the landlord. A very heavy tax might discourage,
too much, this attention and good
management. Ground-rents, so far as they
exceed the ordinary rent of land, are altogether
owing to the good government of the sovereign,
which, by protecting the industry either
of the whole people or of the inhabitants of
some particular place, enables them to pay
so much more than its real value for the ground
which they build their houses upon; or to
make to its owner so much more than compensation
for the loss which he might sustain
by this use of it. Nothing can be more reasonable,
than that a fund, which owes its existence
to the good government of the state,
should be taxed peculiarly, or should contribute
something more than the greater part of
other funds, towards the support of that government.
Though, in many different countries of
Europe, taxes have been imposed upon the
rent of houses, I do not know of any in
which ground-rents have been considered as
a separate subject of taxation. The contrivers
of taxes have, probably, found some difficulty
in ascertaining what part of the rent ought to
be considered as ground-rent, and what part
ought to be considered as building-rent. It
should not, however, seem very difficult to
distinguish those two parts of the rent from
one another.
In Great Britain the rent of houses is supposed
to be taxed in the same proportion
as the rent of land, by what is called the annual
land tax. The valuation, according to
which each different parish and district is assessed
to this tax, is always the same. It was
originally extremely unequal, and it still continues
to be so. Through the greater part of
the kingdom this tax falls still more lightly
upon the rent of houses than upon that of
land. In some few districts only, which
were originally rated high, and in which the
rents of houses have fallen considerably, the
land tax of three or four shillings in the pound
is said to amount to an equal proportion of
the real rent of houses. Untenanted houses,
though by law subject to the tax, are, in most
districts, exempted from it by the favour of
assessors; and this exemption sometimes
occasions some little variation in the rate of
particular houses, though that of the district
is always the same. Improvements of rent,
by new buildings, repairs, &c. go to the discharge
of the district, which occasions still
further variations in the rate of particular
houses.
In the province of Holland,[59] every house
is taxed at two and a-half per cent. of its
value, without any regard, either to the rent
which it actually pays, or to the circumstance
of its being tenanted or untenanted. There
seems to be a hardship in obliging the proprietor
to pay a tax for an untenanted house,
from which he can derive no revenue, especially
so very heavy a tax. In Holland,
where the market rate of interest does not
exceed three per cent., two and a-half per
cent. upon the whole value of the house
must, in most cases, amount to more than a
third of the building-rent, perhaps of the
whole rent. The valuation, indeed, according
to which the houses are rated, though very
unequal, in said to be always below the real
value. When a house is rebuilt, improved, or
enlarged, there is a new valuation, and the
tax is rated accordingly.
The contrivers of the several taxes which
in England have, at different times, been imposed
upon houses, seem to have imagined
that there was some great difficulty in ascertaining,
with tolerable exactness, what was the real
rent of every house. They have regulated
their taxes, therefore, according to some more
obvious circumstance, such as they had probably
imagined would, in most cases, bear some
proportion to the rent.
The first tax of this kind was hearth-money;