This is my summary based on a column by George Monbiot.
Land in the UK is now in the hands of a small number of people. This has resulted in increasing inequality and exclusion, high cost of renting or buying a home, the collapse of wildlife and ecosystems, repeated financial crises and the loss of public space.
Since 1995, land values in the UK have risen 412% and accounts for 51% of the UK's net worth. Successive governments have used tax exemptions and other advantages to use the ground as a speculative money machine. A Tax Justice UK report (2019) reveals that by owning agricultural land, 261 rich families escaped £280m in inheritance tax in 2015-16. With farmland being used as a tax shelter, farmers are being priced out.
The value of agricultural land can rise 250-fold when planning permission is given and the owner gets to keep most of it. We pay for this with higher rents and mortgages. Capital gains tax is lower than income tax, and council tax is proportionately more expensive for the poor than for the rich. The land under homes now accounts for 70% of their price. Rather than save for three years for a deposit, the average family now needs to save for 19 years. Housing costs take 36% of household costs for renters and 12% for those with mortgages.
We wrongly blame immigration, population growth, the green belt and red tape, when the real culprits are the tax and financial advantages for landowners and building companies, and the shift in bank lending to the housing sector. These issues are also responsible for the loss of public spaces in cities, limited right to roam, lack of allotments and farmland, and impact on the environment.
The six experts who wrote the report propose the following.
- Replace council tax with a progressive property tax payable by owners, not tenants.
- Empty homes automatically taxed at a higher rate.
- Inheritance tax replaced with a lifetime gift tax.
- Capital gains tax on second homes and investment properties should match or exceed the rate of income tax.
- Replace business rates with a land value tax, based on rental value.
- A 15% offshore tax should be levied on properties owned through tax havens.
- New public development corporations should work with local authorities to assemble the land needed for affordable homes and new communities.
- Builders would compete on quality, rather than amassing land banks.
- These public corporations would use compulsory purchase to buy land at agricultural prices (not those artificially raised by planning permission).
- A community participation agency to help people (not big companies) become the driving force in creating local plans and infrastructure.
- A new definition of public space, with legal right to use.
- Tighter rent and eviction controls.
- Compulsory sale orders to bring vacant and derelict land onto the market and give community groups first rights to purchase it.
- Set up a new body - the Common Ground Trust. When people can't afford to buy a home, the Trust could purchase the land, and they pay only for bricks and mortar (about 30% of the cost). They then pay the Trust a land rent.
Source: Landfall by George Monbiot, 12 June 2019. https://www.monbiot.com/2019/06/12/landfall/
