Friday, 30 September 2016

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.

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