Mr. Ronan Lyons:

In the context of high value houses on low value land, this is very much a footnote to the differential effect of a full value tax compared with a site value tax. The latter encourages people to use land well. If we were to introduce a full value tax, we would actually punish construction activity at the very time when we need to be fostering it by encouraging retrofits and extensions. We must encourage people to use their land well, particularly because many of them will, as a result of negative equity, be stuck on the same plot of land for the foreseeable future. The primary effect of a site tax would assist in encouraging individuals to use their land well.