What is wrong with wanting cheaper homes

CLAPTON

HAMISH_MCTAVISH wrote: »

Beyond the obvious point that land taxes would make the cost of ownership or renting more expensive, and the last thing this country needs is more taxes....

The same capital gains taxes apply to investment properties as do to shares or other assets.

And similar tax exemptions happen for primary residences as savers get through ISA's, etc.

Council tax or business rates are applied to all developed land.

So I can only suggest you are talking about undeveloped land, which would be counterproductive. As while it would reduce land banking it would also reduce the ability of the market to rapidly increase supply when conditions become more favorable to building more.

I think the idea of land taxes are worth consideration

basically the idea is that if land has planning permission then the tax will be based on its developed potential

this will encourage people to develop land rather than hoare it.

I'm not sure it what way it discourages land banking as some-one will own it whatever the situation

ILW

HAMISH_MCTAVISH wrote: »

So I can only suggest you are talking about undeveloped land, which would be counterproductive. As while it would reduce land banking it would also reduce the ability of the market to rapidly increase supply when conditions become more favorable to building more.

I would suggest that builders are already sitting on large land banks and have calculated that that they will make bigger profits if they just sit on this resource until prices rise. A land tax that made it more profitable to build than to hoard could get a lot more places built pretty quickly.

HAMISH_MCTAVISH

CLAPTON wrote: »

I think the idea of land taxes are worth consideration

basically the idea is that if land has planning permission then the tax will be based on its developed potential

this will encourage people to develop land rather than hoare it.

I'm not sure it what way it discourages land banking as some-one will own it whatever the situation

It would discourage land banking of land with planning permission, as opposed to all land banking.

However given that it can take up to a decade to get planning permission for large scale housing projects, it would also inevitably reduce the ability of the market to build more houses when conditions return to enable such building.

yertiz_2

HAMISH_MCTAVISH wrote: »

Beyond the obvious point that land taxes would make the cost of both ownership and renting more expensive, and the last thing this country needs is more taxes....

The same capital gains taxes apply to investment properties as do to shares or other assets.

And similar tax exemptions happen for primary residences as savers get through ISA's, etc.

Council tax or business rates are applied to all developed land.

So I can only suggest you are talking about undeveloped land, which would be counterproductive. As while it would reduce land banking it would also reduce the ability of the market to rapidly increase supply when conditions become more favorable to building more.

Thanks, I shall need to think about your comments, However, I am talking about a Land Tax replacing Council Tax. And that owning a piece of land in order to build a home should be a 'God given' human right in the same way we have water and oxygen?

HAMISH_MCTAVISH

ILW wrote: »

I would suggest that builders are already sitting on large land banks and have calculated that that they will make bigger profits if they just sit on this resource until prices rise. A land tax that made it more profitable to build than to hoard could get a lot more places built pretty quickly.

The current supply of land banked with planning permission is good for about 300,000 housing units.

This is almost a 3 year supply based on the numbers we build today, but only a 1 year supply based on what we need to be building to keep up with population growth.

The accounts of the national builders are in the public domain, and profit margins are in single digits... They just don't have a lot of room to move on price.

It's not that builders are hoarding to make bigger profits, it's that they are only building what they can sell given extremely limited mortgage funding.

HAMISH_MCTAVISH

yertiz wrote: »

I am talking about a Land Tax replacing Council Tax.

Then what difference would it make?

And that owning a piece of land in order to build a home should be a 'God given' human right in the same way we have water and oxygen?

Why?

ILW

HAMISH_MCTAVISH wrote: »

It's not that builders are hoarding to make bigger profits, it's that they are only building what they can sell given extremely limited mortgage funding.

If the cost of sitting on the land became restrictive, the owners would have limited choices, either sell to someone who would develop, build and sell, or build and rent. Whichever way it would increase the supply of housing. The worry is that it would reduce the cost of housing.

HAMISH_MCTAVISH

ILW wrote: »

If the cost of sitting on the land became restrictive, the owners would have limited choices, either sell to someone who would develop, build and sell, or build and rent.

Only for the small amount of land, approx a 1 year supply under current circumstances, already banked.

And it wouldn't drive down prices because at the end of the day, if they can't sell profitably, they won't build.

Better to give up planning permission and revert the land to agricultural use than be forced to build houses and sell at a loss.

Linda_D_2

I'm a homeowner and have paid off all the mortgage on my house but would still love to see house prices drop by a considerable amount so others get the chance to afford to buy their own homes.

HAMISH_MCTAVISH

Linda_D wrote: »

I'm a homeowner and have paid off all the mortgage on my house but would still love to see house prices drop by a considerable amount so others get the chance to afford to buy their own homes.

Lovely sentiment and all, but house prices dropping by "a considerable amount" would also wreck the economy, force millions into unemployment, cause tens or even hundreds of thousands to become homeless, reduce even further the number of houses being built so causing the worst housing crisis in UK history, and be responsible for mass misery on an epic scale.

Doesn't sound like such a good idea when you consider the consequences, does it?