Should there be a general election soon, home owners may want to take note of Jeremy Corbyn’s plans to scrap council tax and replace it with a ‘progressive property tax’.
Mr Corbyn would ensure that those with larger (i.e. family) homes and gardens would be faced with a staggered higher rate of taxation for each of the top four property bands by value.
In a slightly confusing move, the report says that Stamp Duty Land Tax should be phased out for those buying homes to live in themselves, and capital gains tax for second homes and investment properties should be increased.
It also proposes that tenants will be exempt from council tax and that only property owners will pay, but makes no comment about how that would affect rents.
These plans won’t bring any rays of sunshine to hard pressed estate agents, especially those marketing even ‘normal’ family homes. The recommendations come within Labour’s “Land for the many” report, which aims to “Change the way our fundamental asset is used, owned and governed.”
The proposals within the report are for the Labour Party to consider these as part of its policy development process in advance of the next general election.
James Brokenshire, the Housing Secretary, said, “These proposals are extraordinary and deeply damaging in equal measure. This tax bombshell for families would mean family homes with gardens paying far more and higher taxes on pensioners by abolishing the single person discount.”
End the Buy-to-Let frenzy
The report also believes reform is needed in the PRS: “We recommend major reforms of the private rented sector. For example, tenancies should be open-ended and landlords should lose their power to evict a tenant who has not broken the terms of the tenancy agreement for the first three years of the tenancy agreement, and should have to provide grounds for eviction after that point. There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower). We propose that Buy-to-let mortgages should be more firmly regulated and restricted.”