In 1907 a Bill (the "Land Values (Scotland) Bill") to provide for the ascertainment of land values in Scotland, passed its second and third readings by large majorities in the House of Commons, but was rejected by the House of Lords. The Bill was introduced into the House of Commons by the Lord Advocate on behalf of the Government, and followed the recommendation of the Select Committee which considered the Land Values Taxation, etc. (Scotland) Bill of 1906. It was expressly provided by the new Bill that until Parliament otherwise determined no person was to be rated in respect of the land values ascertained under the Bill, and no immediate alteration of the incidence of taxation was, therefore, involved. The Bill was intended to pave the way for subsequent proposals regarding the amendment of the existing system of local taxation, and to furnish statistical data upon which those proposals might be based.
The provisions contained in the measure were that an additional column should be inserted in the valuation roll for each county and burgh in Scotland and that the capital land value of lands and heritages (other than those valued by the Assessor of Railways and Canals) should be inserted therein. "Capital land value" was defined as the sum which the lands and heritages might be expected to realise if sold by a willing seller in the open market, and assuming that they had been divested of buildings, erections or improvements of any nature, on, in, or under the soil, woods, fixed or attached machinery, and work of reclamation, making up, levelling, and the like, where such work had been executed not more than twenty years preceding. The value of any common interest in land was to be included, and it was to be assumed that the land was sold free from all burdens, public and private, except building restrictions or servitudes. Restrictions or servitudes fictitiously created after the passing of the Act might, however, be disregarded.
In the case of lands and heritages for which there are two or more occupiers, e.g., houses let off in flats, the assessor might, unless a separate capital land value could be ascertained in respect of each occupancy, enter the total against the occupancy he considered most appropriate. It is obvious that the simplicity so secured could not have been retained if the capital land value had been made the basis for taxation.
The first valuation on the new system was to be made for the year commencing Whitsunday, 1909, and the procedure of the Valuation Acts was, with minor amendments, to be applicable to the new entries in the valuation roll. Returns stating the capital land value might not, however, be called for from the tenant or occupier, and the Secretary for Scotland was empowered to alter, for the purposes of the Bill, the dates prescribed by the Valuation Acts for the various stages of valuation procedure. The Bill also provided that appeals to the Court of Session upon valuation matters should be heard by three judges instead of by two only. This provision would have secured a decision in all such appeals, no decision being at present obtained when the opinions of the two judges differ.
The most important features of the Bill were, perhaps, the provision for the valuation of all land in rural districts as well as building land in urban areas, and the adoption of capital value in preference to annual value. In the case of large areas of building land awaiting development no direction was given as to whether the land should be valued as one plot or as several.