Sunday, Nov 15, 2009

Probably never happen

Observer: TUC calls for £5bn tax on empty homes

"The TUC wants the chancellor to charge five times the usual council tax – an average of £5,875 – on homes standing empty to persuade owners to sell or let them."

Posted by letthemfall @ 10:35 AM (1832 views)
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17 Comments

1. alan said...

If implemented, this could bring a lot of houses back onto the market causing prices to decline quickly. It would help FTBs and bring rents down.

As most MPs own several houses and the legislation would impact their own pockets, MPs are unlikely to agree to this measure.

Sunday, November 15, 2009 12:46PM Report Comment
 

2. charlie brooker said...

Its surely a form of Land Value Tax.

Does Fred Harrison know about this news from the TUC?

Sunday, November 15, 2009 01:01PM Report Comment
 

3. Peter said...

Why not put a £1m per square foot tax on trade union premises, starting with the TUC?

Sunday, November 15, 2009 01:05PM Report Comment
 

4. will said...

What a great idea. That should ensure a crash as desperate landlords lower prices to fill their properties, but I doubt it will happen.

Sunday, November 15, 2009 01:56PM Report Comment
 

5. dbc reed said...

@Charlie Brooker
To some extent this may turn out to be be a Land Tax as most of the houses you see on the Empty Homes Agency website ( the daddy on this issue) look well derelict and worth not much more than their site value.This is not the case with all those houses in Mayfair kept empty by speculators , but there the site value will be so high as to do the trick anyway.If LVT were extended to empty and unused sites with extant planning permission this would force 200,000+ onto the market at present stored in developers' land banks waiting to be drip-fed onto the market so slowly that prices don't fall.Then if LVT were extended to all property, house prices would most likely go down across the board as householder/land tax payers would beginning under-estimating how much the land under their houses is worth.So when property prices go up because of new infrastructure like better commuting links, the LVT would scalp the land value rises so neatly as to make the infrastructure self-financing.
When the Labour Party was a bunch of working-class trade unionists ,LVT was the main policy proposal (not income tax,for instance).

Sunday, November 15, 2009 02:39PM Report Comment
 

6. mark wadsworth said...

What DBC says.

This is all blundering vaguely in the right direction, the same as Vince Cable's Mansion Tax and as such is thoroughly to be welcomed.

The problem is that the EHA thinks it is a far better wheeze to try and bribe owners of empty homes to do them up and sell them out, i.e. to subsidise land ownership, rather than to tax it.

Sunday, November 15, 2009 02:51PM Report Comment
 

7. letsgetreadytotumble said...

Another Socialist tax. More ways to raise money, to spend on the work shy and government non-jobs thereby generating more of the Labour vote and further distorting democracy.

Sunday, November 15, 2009 03:21PM Report Comment
 

8. Fromage Frais said...

Excellent Idea,

You rent you don't pay

You buy land build a house you don;t pay

You buy a house fix it up and sell it you don;t pay

You buy and leave it empty like a bank account = you pay

This is such a good idea and one the way to a land tax believe me you should come to Tunisia literally 30% newbuild are used and 70% empty as they have a very soft curency and thus property is seen as a bank account rather than a utility.

Sunday, November 15, 2009 03:25PM Report Comment
 

9. greenmind said...

EAT THE RICH!

Sunday, November 15, 2009 07:06PM Report Comment
 

10. the number cruncher said...

TAX THE RICH
TAX THE LAND
HOUSES FOR HOMES ACROSS THE LAND

WORK HARD FOR YOU MONEY
NO INCOME TAX PLEASE
LOW INCOME MULTIPLIERS ON OUR MORTGAGES IF YOU PLEASE

Sunday, November 15, 2009 08:55PM Report Comment
 

11. mark wadsworth said...

@ Number Cruncher, LVT is not about "taxing the rich" it's about taxing land values. If a Premiership soccer player earns £5 million a year and lives in a £1 million mansion, he'd end up considerably better off with no income tax and proper LVT. I agree with the rest of your bullet points. As LVT acts like a higher interest rate on the land element, loan-to-value ratios would automatically come down, which is yet another advantage of LVT.

Monday, November 16, 2009 10:00AM Report Comment
 

12. letthemfall said...

Taxation is - or should be - about ensuring that no one takes a disproportionate share of the country's resources. Thus land taxation and a progressive income tax makes sense. We're about to make some progress on the second; there may be too many wealthy landowners in govt or other positions of influence for the first to happen.

Monday, November 16, 2009 10:28AM Report Comment
 

13. the number cruncher said...

Mark @ 11
It rhymes though, for my little ditty.

Your footballer analogy is interesting, so following on from the rational of LVT

The footballer derives his wealth from not just his skills, but the entertainment industry - his talents are but one part or a huge entertainment machine and as such taxation should reflect the public value of creating a society that allows him to monopolise that media.

He himself is not worth that money for his work, it is just that society needs its footballing heroes, whoever they maybe. Just as land is a finite resource so is celebrity and thus we must tax celebrity as well as land as it is the whole of society which gives it value.

Deriving wealth from monopoly and not economic work is as much a problem from celebrity footballers as it is with land or oil.

Monday, November 16, 2009 11:06AM Report Comment
 

14. mark wadsworth said...

@ NC, as I have no interest in football one way or another, please note:

a) These international guys will go wherever their net income is highest. So if you hike income tax on them to 50% they'll just go somewhere that pays the same wages but taxes them at 40% - or they will ask for a rise in gross pay to compensate, i.e. their income tax costs UK clubs/fans money.

b) Premiership football might be a kind of cartel/monoploy, but it still competes with other forms of entertainment, and the fans and sponsors pay for advertising/season tickets entirely voluntarily.

c) There is an argument that copyright or patent income is more akin to land values, as it is state protected and hence it is fair to charge a higher income tax on such sources of income. I'm not sure I wholeheartedly agree, but hey.

d) As somebody who doesn't subscribe to Sky Sports or pay for season tickets, footballers' salaries just do not affect me, none of my business.

e) However, Sky Sports pays for its radio spectrum and football grounds are liable to Business Rates, so the football industry pays a reasonable share in land value tax/natural or limited resource value tax.

Monday, November 16, 2009 11:21AM Report Comment
 

15. the number cruncher said...

Mark I feel we have some agreement - I have no interest in football (apart from the occasional interest in Blyth Spartans) and a knock about with my 4 year old boy.

but there are some issues in our discussion that both of us need to explore:

I stated that celebrity was the monopoly and not just football and that the value of celebrity is created by society.

I am a firm advocate of creative commons and the limiting of intellectual property rights as they are the 'enclosures acts of the mind'. Most intellectual property actually harms competition and creates monopoly. But it is all a balance and we need to reward R&D and give innovators the big rewards to aim for.

At present the pendulum has swung to far into the intellectual property owners camp, just as the land owners camp. We need to tax this just as much as land values and this wioll become increasingly important in the future.The law must not allow intellectual property to be a barrier to competitors entering the market place and the vast majority of patents are taken out precisely for that purpose.

The Net Neutrality battle that is raging at the moment is an excellent example of this as the physical carriers of internet bandwith want to sell you the value added content and not the commodity bandwidth, thereby extracting greater value from their monopoly. There are many examples of this but the most obvious one is limiting access to BBC iplayer and facebook unless you pay a 'premium' instead of just selling the bandwidth that you use to access these services.

Monday, November 16, 2009 11:56AM Report Comment
 

16. letthemfall said...

I would say that the pendulum has swung too far to those with capital, whatever form it may take.

The footballer example I think illustrates this quite well. Players used to be paid quite modestly until the creation of the "Premier" league and the arrival of satellite TV contracts, in which a big company (effectively a monopoly) bought up the rights and charged the punters to watch matches on telly. This in turn led to higher ticket prices as salaries skyrocketed.

The argument that players simply follow the cash is similar to the one that bankers will flee this country if their outrageous incomes were to be curtailed here. That supposes there are enough clubs in other countries willing to accommodate all these "top" players at these prices. Even assuming that is so, is it right that so much wealth should be transferred to so few undeserving individuals, not due to their intrinsic worth but to the economic structures that have grown up? Do we want the UK to develop the kind of equalities one finds in S American countries?

One bright spot: test cricket may come back to public TV.

Monday, November 16, 2009 12:28PM Report Comment
 

17. the number cruncher said...

Cricket is a great example
To me heaven is a lazy Sunday afternoon with TMS.

But why should one group is allowed to monopolise the readily accessible part of a sport and then charge for access as if it did not take the whole of society to make those crickiters. The grounds and teams receive special tax breaks, government and lottery funding.

Sport has mirrored house prices in the that they have been exploited by monopolists in connivance with politicians.

The Rupert Murdock business model will next privatise oxygen , bribe and threaten Governments a sell him the rights to own it, and force us to take out a monthly subscription to breath it.

Monday, November 16, 2009 12:49PM Report Comment
 

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