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Housing minister Malthouse vows to keep an ‘open mind’ on land capture ideas

New housing minister Kit Malthouse has vowed to remain “open minded” on new ideas around the issue of land value capture but ruled out any additional transaction tax on property deals. 

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Picture: Parliament.tv
Picture: Parliament.tv
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Housing minister Malthouse vows to keep ‘open mind’ on land capture ideas #ukhousing

In one of his first public appearances since taking on the housing brief in July, Mr Malthouse told MPs on the Housing, Communities and Local Government Committee today that his department is “happy to look at new things”.

The committee is investigating whether changes should be made to allow cash-strapped councils to capitalise on the uplift in land value that comes from public infrastructure investment.

In a wide-ranging session Mr Malthouse, who previously spent six years as finance director at property development firm Cannock Group, told MPs: “A lot of houses need building and there’s a lot of infrastructure that will have to be paid for. We need to find a way to pay for it and remain open minded as to how that seems sensible going forward.”


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But when sked about the possible introduction of a new land value tax, Mr Malthouse appeared to rule out changes. “We have a transaction based tax called capital gains tax which applies to quite a lot of property transactions,” he said. The minister later added: “Large capital taxes on transactions rarely encourage activity.”

Last year’s Labour election manifesto floated the idea of firms paying a tax on the value of their business premises, including the land, to “ensure local government has sustainable funding for the long term”.

Mr Malthouse appeared to reject suggestions there was any shortage of land to develop new housing.

“Among housing associations access to land is difficult because they are competing against the private sector,” he said. “But generally whether more land needs to be made available across the piece? I don’t see a shortage of land being made available.”

 

But he appeared comfortable with the idea of ‘land banking’ – holding on to developable land in order for values to rise – a process which has been placed under investigation by government. He told the committee: “If you were a large house builder you would naturally land bank, right? You would want to have a supply chain going forward of land that you can make available. Striking the balance there is a tricky one.”

He said he wanted to retain an “element of flexibility” in tackling the housing crisis, adding that “small changes can have a very significant impact”.

Asked by Clive Betts, chairman of the committee, if he planned to introduce a “brand new mechanism” for capturing increases in land value, Mr Malthouse replied: “I’m not, no.”

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