A solution to the housing crisis

Some will be surprised to hear this, particularly as I call myself a libertarian, but I am in favour of wealth taxes. I’m generally not much in favour of taxation but I compare Britain to, say, South Africa and I think to myself, “Thank God for our welfare state.” When you are mugged in Britain (which seems to be happening less often) they may take your iPhone but you will at least be allowed to keep your clothes.

The government protects property, if you are fired from your job (with appropriate cause) and thus lose your income you have no right of redress, after all in all but a small number of circumstances it would be impossible to “own” an income anyway. There are some incomes which are protected (annuities for example) and thus it would seem reasonable to tax them.

However, in the pantheon of things the government of the UK does well it does almost nothing better than protect the ownership of real property. Some would argue (perhaps correctly) that this service is paid for by Stamp Duty. Though it seems odd that whether you “own” some land for one year or an hundred the government will provide restitution against anyone who takes it from you for the same cost.

Many people have noticed that there is a drastic restriction in the supply of houses in this country and some, myself included, would like to see the Town and Country planning acts abolished, or at least severely curtailed, and I would be sympathetic to that point. However, one would expect that given that the vast majority of the price of a modern house is in the permission to have built it one can only imagine that this would push enormous numbers of people into negative equity which with the interconnectedness of financial institutions could spell disaster.

My solution is simple. Remove the requirement to get approval to build on land but institute an 8% annual value tax on the last purchase price of land, building, or long lease (over 21 years) modified in a way that would have previously required planning consent. Combined with a requirement that all such property when sold in the future must be sold at auction.

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