Saturday, 14 July 2007

Affordable housing

This latest pronouncement by the Goblin King is not going to help anybody.

What he should have done in 1997 is to introduce Land Value Tax aka Site Value Rating for residential land at about 5% of site-only unimproved land values and get rid of Council Tax, Stamp Duty, Inheritance Tax and Capital Gains Tax. This would have fiscally and politically neutral and made life easier for everybody.

More importantly, the current price bubble would never have happened: a 5% annual tax on the value of land would have kept land prices, and hence house prices, much lower.

Ah well, better luck next crash.


pommygranate said...

mark - still seems unfair on asset-rich but cash-flow poor pensioners to me.

Mark Wadsworth said...


Which is why any sensible Land Value Tax scheme would allow pensioners to roll up LVT at low or no interest, to be repaid when their home is sold after they die.

This'd be a lot simpler and easier to sort out that Inheritance Tax.

NB - Council Tax hits not-so-asset-rich but cash-flow-poor pensioners particularly hard!