'People prefer paying user charges; they like living in tax havens where their work
What they wanted known is that infrastructure and services provided by the state invariably raises the price of land.
This windfall can be captured, as a rates surcharge, to pay for the road, bridge, electricity connection, rail or port improvement, even a national health scheme. If it is not recovered, it becomes a subsidy to landowners.
So future roads should be paid for, firstly, by those who benefit from the largesse of the state and, secondly, by the users to cover depreciation, maintenance and management (whether tolled or not).
Average residential stands have risen 13 times in value since 1994, according to Absa. That means, roughly, R6-trillion in the capital value of land under about 11-million formal houses, or R27.5-billion a month in land rent (using a rental multiple of 16.7 years). This excludes rents from agriculture, commercial and industrial, state and unused land. Overall, land rents could replace all income taxes and VAT.
People prefer paying user charges; they like living in tax havens where their work, profits and purchases are not purloined. This value-capture principle is recognised all over the world.
Well-tended arteries are as fundamental to the economic health of a country as they are to the well-being of its citizens. Land-rent collections are the key to self-funding infrastructure. – Peter Meakin, registered valuer, SA Institute of Valuers, and chairperson, SA Constitutional Rights Foundation management committee