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 
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;