The government should consider replacing council tax and stamp duty with an annual property tax paid by the owner rather than the resident, according to a new report by the Joseph Rowntree Foundation (JRF).
Written by Rose Grayston, Toby Lloyd and Neal Hudson, the report also suggests that councils should have the ability to declare ‘housing pressure zones’ where they can set the rules about who can buy properties in particular areas. This, the authors say, could be used to restrict investor activity where high demand for second homes or low demand is fuelling exploitative lets.
The report is a response to the housing market facing a “worst of all worlds situation”, JRF said, citing “rising interest rates and high inflation [creating] the conditions for a housing market freeze unless the government acts quickly”.
It describes a market where “building stops, transactions stall, cash-rich investors swoop in to buy up properties, rents continue to spiral and vulnerable homeowners are stuck in unaffordable homes”. JRF said that this will “have serious consequences for the economy without seeing a corresponding fall in house prices”.
The report suggests a list of measures for the upcoming budget on 15 March, including an increase on the stamp duty surcharge for investor purchases, removing tax breaks for short-term lets, and levying council tax on homes in new developments 18 months after planning permission has been granted, whether they are built or not.
Darren Baxter, principal policy adviser at JRF, commented: “We are facing a housing downturn that will put vulnerable families and our country’s economic prospects into serious difficulty. The government must confront this head on and recognise that past approaches will not work this time.
“Instead, the government must tackle both the short-term fallout from the housing downturn we find ourselves in and the deeper problems within our housing system. By acting now, and doing both at the same time, government will ensure we are better placed to come out of this downturn with a fairer, more secure and more affordable housing system in reach.”
Comments (5)
The government should consider replacing council tax and stamp duty with an annual property tax paid by the owner rather than the resident – a recipe for increasing rents.
and decreasing availability.
I respect the history of social responsibility of the JRF, but these days, such charities are staffed by young, well meaning but know-nothings, and run by highly paid establishment figures. Shelter is the exemplar.
Landlords with cash have always exploited opportunities to buy, and there are plenty on these sites saying they can and will. That’s not a problem, fill yer boots, provided they provide decent rental properties, at affordable rents. Indeed, it is this government’s objective of forcing out the smaller landlords and creating large [unaccountable] landlords. As to the argument landlords are taking houses from potential homeowners, not everyone can or wants to buy. Who will provide the rentals they need if they are all owned? But I do believe there is a short term opportunity to increase SDLT for such purchases, and in all honesty, landlords shouldn’t complain if they are making a killing on the purchase.
As to making landlords responsible for council tax, they seem to have lost sight of the purpose of council tax.
It’s about time these so called “charities” were taxed to oblivion.
More muppets!