Proposals to tax land were published by the Land Commission, offering options for the Scottish Government to take forward. The report states the aim of a land value tax is to reduce derelict land, capture land price spikes for the public purse and create more diversity of ownership. However, the Scottish Government states there are no plans to create a tax at this moment, claiming there are “significant practical problems to be resolved”.

The report suggests that using a land value tax could achieve these objectives, but the Reading University-written report does state that a number of practical issues would need to be resolved before any system is implemented. Options in the report include creating a new land tax system and including farmland in business rates.

“The research suggests land value tax could contribute to addressing key land reform objectives, including bringing vacant and derelict sites into use, reinvesting rising land values to public benefit and moving to a more diverse and productive pattern of land ownership,” said Hamish Trench, chief executive of the Scottish Land Commission. The Scottish Green party is keen to seen this proposal move forward.

Scottish Green party MSP, Andy Wightman, said: “This is a very welcome report which recognises the massive untapped potential of using land values to raise funds for public services, as well as encouraging fairer and more productive ownership of land, rather than the speculative hoarding of it – which blights many communities.

“It’s good to see this long-standing Scottish Greens policy being actively considered by the Scottish Land Commission.”

However Alexandra Docherty, tax partner at Johnston Carmichael, who operates NFU Scotland’s Tax Advice Helpline, would urge caution.

“The findings of the report show a lack of practical evidence of these benefits among the countries considered as part of the study.

“There are a number of practical issues that need to be considered carefully by the commission. For instance, the inference of the report is that landowners have flexibility to maximise the use of their land. As we know from regulations surrounding basic payment entitlements within the agricultural sector, landowners are subject to rigid regulations on land use and must conform, otherwise their access to agricultural subsidies would be impacted.”

A Scottish Government spokesperson said: “We have no plans to introduce a land value tax in Scotland. While the Scottish Land Commission report highlights the potential role this tax might have in progressing our land reform policies, it details significant practical issues to be resolved before it could be realised.

“We remain committed to making local taxation more progressive, while improving the financial accountability of local government. We have made clear that we are open to further dialogue on options for local tax reform.”

The report looks into different options for the government, including creating a new taxation system for land and land businesses, like agriculture, in current business rates.

The report looked at land taxation in Australia (Queensland), Estonia, New Zealand, Denmark, South Africa and Namibia for suggestions on how it could be implemented in Scotland. From these case studies the report states: “There was little evidence that land value tax has any perceptible redistributive effect, helps with breaking up large estates, or with bringing under-utilised land in to beneficial use, although it was claimed that in Estonia it had encouraged owners to dispose of land not in productive use.”

In Estonia, the local government sets a land value tax of between 0.1% to 2.0% of the value of the land, with most setting a rate nearer the top of the band.

Meanwhile, land tax was seen as a way to get more diversity of land ownership in Namibia, which the report points out has farmland mainly owned by white people. The taxation of commercial farm land has been seen as a success due to the extent of popular and political support, and the amount of revenue it has raised to fund the acquisition of land for land reform purposes.