rent should be sufficient first to pay the same
interest which he would have got for his capital, if he had lent it upon
good security; and secondly, to keep the house in constant repair, or
what comes to the same thing, to replace within a certain term of years
the capital which had been employed in building it." "If in proportion
to the interest of money, the trade of the builder affords at any time a
much greater profit than this, it will soon draw so much capital from
other trades, as will reduce the profit to its proper level. If it
affords at any time much less than this, other trades will soon draw so
much capital from it as will again raise that profit. Whatever part of
the whole rent of a house is over and above what is sufficient for
affording this reasonable profit, naturally goes to the ground rent; and
where the owner of the ground, and the owner of the building are two
different persons, it is in most cases completely paid to the former. In
country houses, at a distance from any great town, where there is a
plentiful choice of ground, the ground rent is scarcely any thing, or no
more than what the space upon which the house stands, would pay if
employed in agriculture. In country villas, in the neighbourhood of some
great town, it is sometimes a good deal higher, and the peculiar
conveniency, or beauty of situation, is there frequently very highly
paid for. Ground rents are generally highest in the capital, and in
those particular parts of it, where there happens to be the greatest
demand for houses, whatever be the reason for that demand, whether for
trade and business, for pleasure and society, or for mere vanity and
fashion." A tax on the rent of houses may either fall on the occupier,
on the ground landlord, or on the building landlord. In ordinary cases
it may be presumed, that the whole tax would be paid both immediately
and finally by the occupier.

If the tax be moderate, and the circumstances of the country such, that
it is either stationary or advancing, there would be little motive for
the occupier of a house to content himself with one of a worse
description. But if the tax be high, or any other circumstances should
diminish the demand for houses, the landlord's income would fall, for
the occupier would be partly compensated for the tax by a diminution of
rent. It is, however, difficult to say, in what proportions that part of
the tax, which was saved by the occupier by a fall of rent, would fa