Monday, 22 September 2014

Land tax could trigger 'house-building revolution'

A left-wing think tank has launched a paper today calling for a land value tax to help deliver a ‘house-building revolution’.

The Centre for Labour and Social Studies suggests a land value tax could replace business rates and stamp duty, and should be levied on all land except where it lies under people’s homes.

‘Very wealthy homeowners should pay, but those with limited incomes could defer payment where required,’ the report In land revenue: The case for a land value tax in the UK states.

It continues: ‘A land value tax, targeted at unproductive wealth and speculation, could help deliver the house building revolution – and the economic revival – our country desperately needs.’

The paper says the tax should end land speculation which means higher land prices and a lack of land for building.

Because there is currently no tax on empty land in the UK it can be lucrative to acquire it and hold onto it and then sell it at a higher value, the report says.

A land value tax, set at the right level, would encourage efficient use of land and heighten the prospect of the reuse of brownfield sites, the paper suggests. It says it could also moderate house price inflation and reduce the likelihood of future housing bubbles.

Andy Hull, the author of the paper, said: ‘Introducing a land value tax here will take political courage. It will mean facing down vested interests, not least the big land-banking developers who deliberately drip-feed properties onto the market, making large profits on small volumes of output, even though they have the land and the country desperately needs more homes.

‘It will take a manifesto commitment, a real mandate, and no doubt a battle in parliament. But, at least in some sense, this land is ours. And our tax system should reflect that fact.’

Class is a new think tank established in 2012 by unions Unite and GMB and the Institute of Employment Rights.

Readers' comments (68)

  • Ernie Gray

    It could be argued that there is already a form of land tax in operation relating to brownfield sites. The cost of decamintation of sites can in many cases make projects unviable unless supported with subsidy.

    If we want to get the housing market moving, then surely providing some form of incentive through the taxation system to developers would seem to be the best way forward on the basis that where there are sales that the financial appraisal provides some form of cap in terms of the sale

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  • Melvin Bone


    Tax the farmers. Genius.
    #idiots

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  • Fantastic CLASS,we have needed a paper like this for some time, now
    all we need to do is persuade the our two ED's to agree it for our manifesto. This is the sort of thing that will win back core support and
    gain new members and supporters.

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  • Having read the document in full it seems this could be a manifesto commitment for labour in 2015- nice little earner!!! But the deficiency of the entire premise is what to do with the loot raised there is no mention of monies for affordable housing something that Emily Twinch has not mentioned in the article. Fiscal policy is central to May 2015 and more hollow rhetoric to win office???

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  • Evan Owen

    Chwinc

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  • I think the previous comments to mine were placed by either New Labour
    Tories or UKIP supporters.

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  • Ernie Gray

    So, the use of the land tax if it ever came to fruition, would be the perfect answer to the nil grant solution that the HCA would like registered providers to achieve and by the way is likely to be a key plank of the Labour manifesto. So essentially, borrow up to the hilt against your assets and your income stream on the bond market so it does not impact upon the public sector borrowing requirement

    Simples

    And they are.

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  • Melvin Bone

    'levied on all land except where it lies under people’s homes'

    So is this a garden tax as well as a farmers tax?

    #idiots

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  • Chris

    If Labour are going to tax vast open spaces, how will their policy unit ever afford the bill?

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  • Ernie Gray

    All of the political parties know that they do not have the monies to stimulate growth, so let's tax everybody else. At some point public sector borrowing is going to have to increase, albeit in the short term to stimulate growth otherwise the flatlining of the economy will continue.

    The problem is that no political party is going to act like a turkey voting for Christmas.

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