Thursday, 11 July 2019

LAND FOR THE MANY (not the few)

THE LATEST BRAVE ATTEMPT BY THE LABOUR PARTY

TO CURB THE PARASITE (rentier) ECONOMY


https://labour.org.uk/wp-content/uploads/2019/06/12081_19-Land-for-the-Many.pdf
  

Only ref to LVT is to replace business rates (UBR). Otherwise avoids the topic altogether. Is this an example of shrewd political calculation? Dodge the smearing headlines in the Daily Mail (inspired by Conservative Central Office of course!) that “Corbyn is going to inflict the dreaded ‘Garden Tax’”. So stupid are the Mail hacks, that they think the tax will be levied on a per square foot basis depending on garden size! 

https://www.dailymail.co.uk/news/article-7145233/Essex-resort-boasts-biggest-gardens-Britain.html


But have they made it clear what the LAND element in house prices consists of? 
Not explicit, but more of a throwaway. 
P5 “the problem of house price inflation is, at root, a problem
of residential land price inflation

P 10 Most of this rise in value [of land generally, not just housing] is the result of speculative inflation, rather than improvements. “Land,” Winston Churchill argued in 1909, “is by far the greatest of
monopolies”

p 31 “dampening demand from Buy-to-let buyers, and therefore removing one of the key drivers of residential land price inflation”

 dangerously close to blaming it all on BTL! 

——
P32.
Reform taxation of land and property
The UK’s current system of residential property taxation is regressive, arbitrary and
economically inefficient. The following reforms, by contrast, are designed to:
• Discourage the use of homes for speculation and rent extraction, and thereby
help to stabilise land prices;
• Reduce the amount of unearned windfall gains that are privately captured, and
make those wealth increases available to cover the health and welfare costs of
an aging society;
• Reduce the level of taxation on the majority of households, and boost
disposable incomes for the bottom half of the income distribution;
• Prompt the more efficient use of the housing stock, by reducing the number
of homes left vacant or empty, and encouraging people to downsize where
possible.
Replacing Council Tax with a Progressive Property Tax
We recommend that a Labour government replace the regressive and unpopular
council tax with a progressive property tax based on contemporary property values.
Unlike council tax, this tax would be payable by owners, not tenants. This would
result in significant administrative savings, lower levels of arrears and less court action.
Unlike council tax, the progressive property tax rate would be based on regularly
updated property values,135 and the rates would be set nationally, rather than
locally determined. The level of redistribution between local authorities would need
to increase substantially under this system, to ensure that the local authorities with
high social needs and low land values are not left dependent on central government
grants. However, there could be a tax free allowance that varied regionally so as to
make, for example, the least valuable 10 per cent of properties in each region tax-free.
Progressivity should be further improved by levying a progressively higher rate of
taxation on each of the top 4 deciles of property by value.
In line with Labour’s existing plans for council tax,136 we recommend that the new
progressive property tax be levied at a significantly higher rate on second homes
and empty homes,137 to encourage a more efficient use of the housing stock. Further,
we recommend that homes classed as ‘main residences’ but owned by people
who are are not domiciled in the UK for tax purposes (‘non doms’) should carry a
similar surcharge.138 The Annual Tax on Enveloped Dwellings discussed below should
discourage people from using corporate ‘wrappers’ to avoid such a surcharge.

Such a progressive property tax could generate more revenue, encourage the more
efficient use of the housing stock, leave the large majority of households better off,139
and boost average disposable incomes for the least wealthy half of population

To
further sweetenthis tax change we recommend that Stamp Duty Land Tax141 be
phased out for people buying homes to live in themselves, since it unfairly penalises
people who need to move house.142 It should remain in place, however, for dwellings
purchased by ‘non doms’, companies, and all second homes and investment properties

and However, there could be a [new council]tax free allowance that varied regionally so as to
make, for example, the least valuable 10 per cent of properties in each region tax-free.
Progressivity should be further improved by levying a progressively higher rate of
taxation on each of the top 4 deciles of property by value.

P43
People wishing to release equity from their homes(e.g. in retirement) may also be
interested in selling the land beneath their homes to the Trust, especially in cases
where interest rates on home equity withdrawal products were more expensive than
the land-rent. Membership would not be available for speculators, landlords or second
home owners.

Why couldn’t that be done now?

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