Describing property as the 'fundamental asset', Labour's commissioned report entitled, Land for the Many, sets out its vision for property and land.
The inequality of the housing market, property price bubbles and cost of renting are highlighted as blights on the face of the country. A number of recommendations are set out to combat these issues and here is a summary of the most impactful ones:
- Essentially make the land registry a free and open data source. Allow the public to see, free of charge, who owns any bit of land across the country - going as far as identities of beneficial owners. At the moment house price data is public and open data but getting titles for purchases and registry titles is chargeable on a per request basis. Labour propose that the Land Registry becomes an executive agency of the government again and some of the over £500 million it holds in cash to be used to fund the transparency move.
- Align the income to house price multiple to make housing affordable. Labour would freeze property values over time as income inflation catches up. The method to achieving this is stated as removing the attractiveness of property and land as financial assets and thus end house price inflation. To prevent any fall in prices in the same period, Labour would create a non-profit institution to purchase the land the property sits on and thus reduce the funds needed to purchase the property. The buyer would then pay a land rent to the non-profit.
- Renters would have open-ended tenancies, with tightened rules on how evictions can be enforced. Rent increases will be capped to the CPI or Salary Indexes (the lower of the two). Landlords would be further restricted with Buy-to-Let mortgages having new rules applied. Social housing would be built with new nationwide programs. Renters would no longer pay council tax, more on this below.
- Council tax would be replaced with a progressive, property tax. Renters would not pay this, but property owners. The property tax would be set by the government, centrally, and not by local councils. Property valuation for house price factors in calculation of the tax would be refreshed annually. Part of the motive to remove houses as assets would be enforced further with empty homes and seconds being punitively taxed, and non-UK resident owners also being surcharged. On the same principle, business rates would be abolished to be replaced by a land value tax - basis being the rental value.
- Stamp duty would be removed completely for private principal home purchases. The funds for this would be allocated by increasing CGT, capital gains taxes, on investment property. Inheritance tax would also be removed and replaced with a lifetime gifts tax, payable by the recipient of the gift.
More detail on the property tax shows that Labour plans a tax free allowance for property tax, and then progressive band, similar to income tax, from there up. This would allow the cheapest ten percent of property to be tax exempt. Property deemed to be at the higher end would be progressive taxed more, with higher bands skewed toward the top forty percent of property values.
Current Conservative Coalition Housing Minister, James Brokenshire has stated that Labours plans are a 'tax bombshell', and a shift toward more 'state control'. He also stated the progressive aspect of property tax would hit families harder as they would have larger more valuable property by default.