HOUSES CHEAPER, BETTER, MORE.
ARE WE ANY NEARER YET?
SO FAR: AS FAR AS CITIZENS (VOTERS) SEE IT
—We’ve got rid of a hated tax, Stamp Duty. Instead of the big one-off lump of Stamp Duty when a house is sold there will be a small annual Land Value Tax. This is politically canny, because it replaces a really bad tax. The replacement will feel less painful because of consumers’ short horizons. The annual series of payments feels much more manageable, and dosn’t have to be dealt with now.
—To make the new LVT even more palatable, there are refunds (Citizens Housing Allowances) payable depending on the number of people (citizens, residents) living in the house. For the vast majority of families, especially outside London and the South East, there will be nothing to pay, maybe even a pay-out.
TECHNICALLY THIS IS WHAT HAS BEEN ACHIEVED
—Methods for valuing Land separate from ‘house price’ will have been established and written into case law. The basis for Land Value Tax becomes soundly based.
—The Citizens Housing Allowance becomes the basis for Basic Income
—About 10% of the Land Value has been reclaimed through LVT. The age-old fully agreed Theory of Land Values says that the market price for the house — in reality the price of the house + land — will drop by this amount. Houses might be 1% cheaper in South Wales Valleys, but in London suburbs houses could be 8% cheaper to buy, a reduction of £50,000 per house.
So, houses a little bit cheaper in the areas of maximum housing stress.
But what about better houses? And more houses, houses in abundance?
It may take quite a bit more LVT to see any significant improvements on the better and more housing fronts.
But at least we’ve made a start on probably the only sure path to redeem the housing market and stop the on-going crisis.