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Property sales levy ‘could raise £62bn for housing and infrastructure’
A property sales levy of the kind currently running in New York could raise £60bn, according to a report by the Association for Consultancy and Engineering (ACE).
The report, Unlocking Housing: Invigorating Local Communities Through Placemaking, contains a number of recommendations, many on how to generate community support for housebuilding.
Apart from the sales levy, which it recommends as a replacement for the Community Infrastructure Levy, currently used by local authorities to get developers to contribute to local infrastructure, it has various other recommendations.
These include encouraging more local authorities to establish their own development companies, creating an England-wide national spatial plan and devolving the ability to set planning fees to local authorities.
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The levy, its main recommendation, would charge a 1% tax on the sale or transfer of property worth £350,000 or less and 1.425% if worth more.
In England, ACE estimates this would raise £2.16bn and if transferred to local authorities could be worth £62bn in long-term bonds.
Dr Nelson Ogunshakin, chief executive of ACE, said: “Our proposals are mirrored on a proven model and would enable local authorities around the country to share in the gains of the property market and receive the vital funds they need to kick-start a housing revolution and invest in its supporting infrastructure, so all can benefit.
“In our view, local authorities are best placed to tackle the housing crisis and a property sales levy would ensure they have the tools at their disposal to do so. For too long we have skirted around the issue – we need to find new ways to fund the homes the country desperately needs.”
To coincide with the report, ACE is also launching a new All-Party Parliamentary Group on Building Communities to look at how to put the proposals into practice.
Update: at 16.58 on 19.6.18 This story was updated when ACE realised that due to a calculation error, the potential income from the levy was up to £62bn, not £200bn.
