The government should launch a consultation before changing the property tax system, while they should avoid making small tweaks in the meantime.
That is according to Sir Vince Cable, chair of the Independent Housing Policy and Delivery Oversight Committee.
According to reports, Chancellor Rachel Reeves is considering altering property taxes in the Budget by getting rid of stamp duty and introducing a national property tax on homes worth over £500,000.
But Sir Vince said: “Change on the scale necessary demands the most careful consideration and at the least, a White Paper and extensive consultation to avoid unintended consequences to this fundamental aspect of society.”
However he added: “There is no doubt that the housing market is not working efficiently and property taxation is a significant factor. The case for major reform of the whole property tax system – from Stamp Duty Land Tax to inheritance tax to council tax and VAT – is almost unarguable.
“Recent speculation about piecemeal changes in the Budget for revenue raising purposes, if they came about, would be a step in the wrong direction. To take just one example, putting National Insurance tax on landlords would be most likely to lead to higher rents for tenants.
“That is, in effect, an increase in taxation on working people.
“The reality is that wholesale reform is needed to make the market work more efficiently and achieve improvements in housing provision across the country. This is no small task and we do not underestimate its complexity or the political dimension.”
At its first meeting in September the committee identified the following issues with housing: affordability; the destabilising impact of the Renters’ Rights Bill; the challenge of saving for a mortgage deposit; planning; type of housing; quality of housing; the shrinking construction industry; a lack of joined up thinking from government departments; and regional variations.
The group will meet every three to four months.
