From MonyeWeek:
At a seminar for clients of a wealth management company this week I was asked what I would do about the lack of supply of housing in the UK. Many of the attendees are worried about their children – given how expensive houses are, and how few of them there are about, how will they ever get a place of their own?
I'm not sure I approached the question with that much sympathy. Why? Because many of the people who make up part of the cause of the problem, such as it is (I'm not convinced there is a shortage of housing in the UK), were sitting right in front of me.
There are around a million empty houses in the UK – around 300,000 of which are holiday homes. There are probably many hundreds of thousands more being lived in by people who just don't need all of them – one elderly couple in a four-bedroom house for example.
So when they wonder what the government is going to do about the problem, they are looking at the wrong thing. They should be asking what they [themselves] are going to do about it. If the affluent all moved out of their big houses into small houses and put their second homes on the market, supply would rise and house prices would fall in a flash. Problem solved.
I can't see anyone doing this voluntarily – it isn't the kind of solution my audience were looking for. However, if everyone agrees that the supply of housing is too low and that Something Must Be Done, then it seems entirely reasonable to chuck a few property taxes into the mix...
An extra benefit would be that all these taxes would get the non-doms who are currently knocking around in vast London houses and paying not a penny in tax towards the upkeep of the infrastructure around them.
I'm not suggesting we do this (although if we dumped stamp, IHT and the 50% rate, and the government looked to be attempting to live within its means, I wouldn't be against it) but it would be a pretty quick way to get the UK's affluent to solve a problem that both bothers them and which they have at least in part caused...
I left the following comment:
You unfortunately made the mistake of confusing "land value tax" with "wealth tax".
Nearly all existing taxes are on "wealth" or "wealth creation" (from income tax to inheritance tax), but a tax on land is not a tax on wealth, because land (as distinct from buildings) is not wealth, it is merely a legal mechanism whereby land owners can collect wealth from non-land owners, or enjoy wealth created by society in general and nobody in particular (roads, railways, good state school, a nice view etc).
Land is no more wealth than the legal entitlement to welfare or pensions, these are not wealth in themselves and are merely a claim on other people's wealth (via redistributed income tax etc).
As an acid test, with proper wealth taxes (income tax, inheritance tax) there is never a problem with 'ability to pay'. Now, the excuse that they always use for not having LVT is that poor widows in mansions wouldn't be able to afford it, well of course not, because these poor widows aren't wealthy, they are just lucky.
Nice 'Work' If You Can Get It...
1 hour ago
