Labour’s report claims to offer ‘radical but practical policies for land. Here’s what you need to know, writes Alice Wheatley
An independent report commissioned by the Labour Party was published this month. Led by political writer George Monbiot, the report titled Land for the Many has caused a stir with its eyebrow-raising recommendations for how land in the UK is to be controlled, taxed and owned.
The self-proclaimed ‘radical but practical changes’ clearly seek to place land at the forefront of political discussion and the drastic nature of the proposals has certainly fired up conversation and commentary.
Although the report touches on numerous areas of policy development, there is a noticeable focus on tax reform. The report suggests a threefold approach; discouraging the use of homes as financial assets, reducing the tax paid by ordinary households and utilising housing stock more efficiently.
Perhaps the widest reaching proposal is the complete phasing out of council tax. The report calls for the introduction of a progressive property tax based on annually updated property values paid by owners, rather than occupiers. Empty homes and second homes would automatically be subject to higher rates and the rates themselves would be set nationally. Rather more controversially, the report hints that the single occupancy discount would also be scrapped in a bid to avoid subsidising individuals living alone in large homes.
It shouldn’t come as a great surprise that properties owned by non-UK residents and ‘non-doms’ would also be targeted with a council tax surcharge. In the same vein, the report discusses how the Annual Tax on Enveloped Dwellings (ATED) rates should be increased with a removal of the exemption for properties valued under £500,000.
Having seen repeated increases since is conception in 2013, this is no shock. However, the report additionally calls for a 15 per cent tax on the price of any land or real estate purchased by companies based in ‘secrecy jurisdictions’.
Stamp Duty Land Tax (SDLT) has not escaped Labour’s scrutiny either. The report states it is wrong to tax the buyer (who is already shelling out for the property), rather than the seller (who is reaping the financial gain of the transaction).
The suggested solution is to waive SDLT for purchasers buying homes to live in themselves, but for it to remain in place at a higher rate for properties purchased by non-doms, companies and all second homes and investment purchases.
To better monitor land ownership and payment of such taxes, the report declares the importance of a fully transparent public register which would hold open data on all proprietorship (including beneficial owners), prices paid and subsidies offered.
The report also has a strong theme of community-led initiatives. It proposes the expansion of model in Scotland, where the Land Reform (Scotland) Act 2003 introduced a Community Right to Buy. Local authorities would be given a statutory power to require vacant or derelict land to be sold at public auction, with ‘Public Development Corporations’ encouraged to buy, sell and develop land in the public interest.
Feedback from the press has been polarised, with mutterings of ‘Marxist’, ‘Venezuela’ and ‘state control’ difficult to ignore.
With a general election in the offing, only time will tell whether Monbiot’s blueprint proves to be the groundwork of a robust manifesto or merely a provocation tool.
Alice Wheatley is a trainee at boutique private wealth law firm Maurice Turnor Gardner LLP.