Killer Arguments Against LVT, Not (149)

Let's chop that Daily Telegraph propaganda down into manageable chunks, starting with the headline:

House prices would be hit by 'revolutionary' property tax proposed by OECD

The use of the word "hit" panders to the notion that "High house prices are good for us", which is patently not true:

1) Best case, the older generation's loss is the younger generation's gain, so it's zero-sum.

2) Most people have children, and nearly all children have parents. Unless parents actually hate their own children, don't they want their children to be able to afford a house?

3) Apparently, a lot of parents try to "help their children onto the housing ladder" by dipping into their savings or even re-mortgaging to be able to give or lend to their adult children a deposit for an over-priced house. No doubt there are some couples somewhere who say "Luckily, our house had gone up in value, so we could remortgage to raise the money for our children to buy a house" but there's no helping people as stupid as that.

4) While the parents might be sitting on a paper capital gain, that's not real money. But the additional money which their children have to borrow to pay the higher prices is real money; it has to be repaid with interest, month in, month out.

5) Excel tells me that the total amount of repayments on a 25-year mortgage at 6.2% APR is double the amount of the initial loan [=PMT(0.062,25,100)*25]. So for every £1 of the parent's paper capital gain, there's a real £2 cost on the children.

6) One man's expense is another man's income, of course, so who are the real beneficiaries of this - the people getting the big bonuses at banks? The taxpayer who then has to bail out the banks when it all goes wrong? Who?