ALTER Calls for Land Tax on Speculators who Hoard Empty Homes

Reports of empy mansions in Bishop's Avenue, London's Billionaire's row, have highlighted the shocking waste of housing in the capital. Foreign speculators abuse the UK's property ownership laws to provide a safe haven for their wealth. From Russian gangsters, African dictators and tax dodging Greeks, hot money floods onto the UK property market, as overseas speculators seek a safe haven for their fortunes. Our rule of law and impartial system of justice protects their land against trespass, damage and arbitrary confiscation. However the relationship is entirely parasitical. Speculators benefit from the protection of British law, but do not contribute towards the costs of maintaining the state.

At their recent annual general meeting in Oxford, ALTER called for a land value tax to be levied on empty housing that is used for speculation or merely as holiday homes. Such houses can be identified because they are not the principal residence of a UK citizen or taxpayer. It is easy to see that this tax must be set a rate far higher then 0.2% per annum, since this is the typical charge for keeping gold in a secure repository. Housing is a safer investment than gold, and hoarding it is socially harmful. It should be be much more expensive to hoard housing than to store bars in gold in a repository. The tax should be levied at a rate of at least 2% of the land value per year, to strongly discourage hoarding.

Assuming that the land value component of a larger £70 million property in Bishops Avenue is £50 million - a rather conservative assumption- this would yield £1M per year from top end properties. There is no reason that the British taxpayer should provide a free stewardship service for the assets of speculators. However the tax should apply only to the land, hence the name "Land Value Tax", and not to the value of the buildings on it. Hoarding land is harmful; however it would be counterproductive to penalize building activity, since it provides employment to the construction industry.

Members of ALTER also called for all taxation to be removed on incomes less than the living wage. There should be zero tax on incomes below £12.5K per annum, in line with current LibDem policy, and income below the living wage should attract no national insurance charges.