No George, just no

The only capital tax on first homes is stamp duty, but that recoups a tiny proportion of their value when averaged across the years of ownership. Remarkably, it is imposed on the buyer, not the seller.

Tax incidence George, tax incidence. that a tax is nominally imposed upon one person does not mean that they are bearing the economic burden of the tax.

Perhaps the most useful tax would be a levy on under-occupancy. In 2011 I proposed a kind of bedroom tax for the private sector: owners with two spare bedrooms or more should be subject to higher property taxes. This was after I stumbled across some buried government figures showing a 45% increase (to nearly 8m) in the number of under-occupied homes in England in just six years. An under-occupancy tax would encourage people either to sell houses that were bigger than they needed to families that could make better use of them, or to divide them, or to take in lodgers.

You can see it now, can’t you? Nope, only two bedrooms in this house. And this is the master dressing room, the study, the sewing room, the lady’s dressing room…..

The United Kingdom is remarkable in that it imposes no land value tax and no capital gains tax on principal residences; and charges council taxes that appear to be the most regressive major levies of any kind anywhere in western Europe.

And most of his complaints are about London. And do you know what else London has that most other European cities do not? A green belt. Abolish that and most of those problems will go away. After all, we all do actually know that it’s no more than a subsidy to those who own land inside it.

23 comments on “No George, just no

  1. The best way to encourage people to live in a house the right size for their current family size would be to reduce stamp duty; a tax on housing mobility.

  2. @Alex
    “The best way to encourage people to live in a house the right size for their current family size would be to reduce stamp duty; a tax on housing mobility.”
    Good idea. I am not sure that getting rid of the green belt would help though, most people want to live in zones 1-4 if house prices are accurate. Concreting over Richmond Park would be a better idea and as Lib Dem who control want the population to rise does make sense.

  3. It is ridiculous that we tax income at 40-45% plus NI yet you can simply sit in a house for 20 years, flog it and pocket half a million tax free.

  4. Or allow multi-storey building more easily. One of the strange things about London, compared to my home Glasgow, is how little of London is multi-storey. You could easily double the number of homes just be that, as New York, Hong Kong, Singapore etc prove.

  5. Thing is George, why restrict this under-utilisation tax just to houses? Why not land? If you use land for a purpose which doesn’t yield maximum economic benefits then you get taxed. Toy farms run by aristocratic gentlemen farmers might suffer though.

  6. I live in West London and I can tell you that London is becoming more multi-storey by the day. Ealing is apartment city. Everywhere they can a large size family house will be replaced with a block of twenty apartments, old shops are beoming seven storey apartment buildings. The population density is increasing massivley, it”s a process that is well underway, at least a million new people are on their way in the next twenty years, listen to Boris. Call me a NIMBY but I’m considering cashing in my high house price and leaving, I don’t want to live in a teeming hell hole, even if it is a clean, crime free one liek Singapore, whcih of course it won’t be.

  7. A property based tax rather than an income-based tax would be a good idea (LVT?). Here though we then run into 2 big problems:

    1. George and his fellow travellers would like it IN ADDITION to an income tax; actually they just want more tax.
    2. George and his fellows just can’t help moralising. So, even when they begin by making an economic case – under-occupancy being a cause of a housing shortage for instance, – they are never able to keep their minds focused. They end up falling into the ‘little old lady’ trap – “We want the property tax to change behaviours. But look at that little old lady with a big house and no income, she looks so sad and lonely and…cute, we can’t ask HER to change her behaviour. And look, she’s got a kitten, ooooh.” or they may skip the ‘hard luck case’ altogether and just moralise straight up – “only tax what I deem to be under-occupancy”.

    And yes, the irony of Georgey Boy arguing for – quite literally – a bedroom tax is just beautiful.

  8. “The only way to fairness in housing is to tax property”

    The “only” way you say?

    So building homes for people to live in isn’t fair then?

  9. Given that most estate agents describe broom cupboards as double bedrooms, perhaps this tax would lead to more accurate advertising. The area of the average home has shrunk to rabbit hutch proportions.

  10. There is no shortage of explanations, and no shortage of solutions. But the problem that lies behind our multiple housing crises is simple and obvious. It is, at root, a failure to tax.

    Bathe in the fuckwittery of that assertion, for a moment. Tax is the answer! For, as we all know, shortages generally go away when the government seizes more money.

    Remind me how much tax the Guardian pays again?

    As Professor Danny Dorling notes in his book All That Is Solid: “No other city in the developed world contains such a deep – and growing – chasm between rich and poor.”

    And yet this doesn’t seem to bother the poor very much, they still choose to flock from all over the world to London. Are they masochists? Why aren’t they listening to Georgie?

    Landlords possess the kind of power once wielded by Norman barons.

    I rented before buying, and only rarely did my landlord shag my wife or force me to fight in her army.

  11. Rents have lagged inflation by quite a wide margin over the last 10 years, even in London.
    Could it have something to do with increased rental supply??

  12. Let’s stop for a second and doff our caps to perhaps the only man alive who can make George’s thoughts seem considered; I refer of course to the LHTD, Richard Murphy

    “The simple fact is, as Danny Dorling has pointed out, that we have enough bedrooms in the UK to house everyone in need of a home. Our problem is that they are misallocated…”

    See, you shouldn’t be able to choose where you live and how; your home must be allocated

    “most houses are needed where existing houses already are”

    An allocation based upon your NEED. Now I wonder who gets to decide need?

    “Access to housing is a major issue in this”

    For ‘access’ read ‘allocation’ again

    “So, is a tax on spare bedrooms fair? Not, of course, if it creates the gross injustices that have been seen in the case of the current bedroom tax on those claiming social security. Due allowance for need has to be made”

    You really do have me at a loss here Richard. For I thought the easy part of George’s article was that ‘need’ had something to do with the number of bedrooms in a house minus the number of people living in it. You know, with everyone kinda being treated the same. Apparently though there is another sort of ‘need’ here. What in God’s name is he talking about?

    “and I think a spare bedroom is not an unreasonable thing to have, if I am honest”

    Oh thank you, thank you. Your generosity knows no bounds oh Great and Merciful One

  13. Nope.

    Apply CGT to owner occupied homes.

    That has the benefit of not having a special “haesing tax” which can be buggered about with in isolation.

  14. I know it’s probably wishful thinking to imagine that George has thought this through, but he does realise that the effects would be across the entire country, doesn’t it?

    I know he imagines that this ‘bedroom tax’ (apologies) would smash rich southerners and give the proceeds to whoever/whatever George and his commissariat think is the most deserving boondoggle this week, but ‘under occupiers’ are very likely to be living in a cheap extremely large houses in Sheffield, Manchester, or Teeside.

    Under his regime it is presumably okay to be the owner and sole occupier of a £200,000 six bedroom Edwardian pile in Blackpool with a tiny mortgage? No tax there. But woe betide someone mortgaged to the hilt in a two-bedroom flat inside the M25, working all the hours to pay their bills. George’s ‘bedroom tax’ is going to go down great there.

    Stick it to the ‘man’ George.

  15. ‘“and I think a spare bedroom is not an unreasonable thing to have, if I am honest”’

    Could it be that the Sage of Downham Market and his GP wife have a spare bedroom in their big house?

    I hope they don’t have two, though. Does anyone fancy finding a random homeless and turning up on Richard’s doorstep with the homeless and a video camera?

  16. Interested

    No, he doesn’t have a spare bedroom; he has made an allowance for HIS need.

  17. As Professor Danny Dorling notes in his book All That Is Solid: “No other city in the developed world contains such a deep – and growing – chasm between rich and poor.”

    Definition, please. How does London stack up against Paris and it’s horrific banlieues, for example? Is this the same sort is statement as that UN clown claiming Britain to be the most sexist country in the world?

    Under his definition, if Roman Abramovich moved to Paris tomorrow would the lives of the poor in London suddenly improve?

  18. @Ironman

    Ritchie doesn’t have a spare bedroom, he has a spare annexe. The fact that is his “office” (the office that’s not an office so can’t be business rated) was a bedroom doesn’t count.

  19. @Rob
    “Under his definition, if Roman Abramovich moved to Paris tomorrow would the lives of the poor in London suddenly improve?”
    Yes I guess but I can’t understand how that would happen, sounds strange to me.
    Also I am surprised that he thinks the divide between rich and poor in Rio is less than in London.

  20. @ Rob: “No other city in the developed world contains such a deep – and growing – chasm between rich and poor.”

    “Developed world” would exclude Paris, and probably Rio…

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